ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 5.11P
To determine
As per the Behavior economics, the assumptions that are in dispute from the traditional economics.
Concept Introduction:
While behavioral economics borrows its sources from psychology, the study of economic
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Suppose that in 2018, you inherited from your grandfather a small planetarium that had been closed for several years. Your planetarium has a maximum capacity of 75 people and all the equipment is in working order. You decide to reopen the planetarium on the weekends as a new laser-tag venture called Shoot for the Stars, and much to your delight it has become an instant success, with admission tickets selling out quickly for each day you are open. Describe some of the decisions that you must make in the short run. What might you consider to be your “fixed factor”? What alternative decisions might you be able to make in the long run? Explain
Multiple choice questions - Microeconomics
35) What is the firm’s efficient scale?
A. the quantity of output that minimizes average total cost
B. the quantity of output that minimizes average variable cost
C. the quantity of output that minimizes marginal cost
D. the quantity of output that minimizes average fixed cost
34) Marginal cost increases as the quantity of output increases. What property does this reflect?
A. diminishing total cost
B. increasing marginal product
C. increasing total cost
D. diminishing marginal product
Discuss the impact of rational self-interest on each of the following decisions.
Whether to attend college full time or enter the workforce full time
Whether to buy a new textbook or a used one
Whether to attend a local college or an out-of-town college
(Production in the Short Run) Complete the following table. At what point does diminishing marginal returns set in?
Units of the
Variable Resource Total Product Marginal Product
0 0 —
1 10 —
2 22 —
3 — 9
4 — 4…
Knowledge Booster
Similar questions
- Jesse owns a shop called J's Select Store in Wisconsin. During the first year of operation, J's Select Store incurred many costs. In that year, Jesse spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Jesse also put in her own money in the business, in which she would have earned $1,500 interests if she put that money in the bank, and her previous job, which she could get back at any time, paid her $50,000. a) If J's Select Store received $80,000 in revenues, what were the economics profits? b) If J's Select Store received $70,000 in revenues, what were the accounting profits?arrow_forwardImagine Tom's annual salary as an assistant store manager is $30,000, he owns a building that rents for $10,000 yearly, and his financial assets generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. Which of the following statements is true? Tom earns an accounting profit of $35,000. Tom has an opportunity cost of $41,000. All of these are true. Tom experiences an economic loss of $6000.arrow_forwardprovide an economic explanation for the provided text below While on vacation, you go to a miniature golf course on a weekday and notice no other customers there while you golf. Why do you think a miniature golf course would stay open during the week when it seems like the revenue from so few customers could not possibly cover the costs of running the golf course? What is an example of another business that stays open even when it's slow, and their revenue does not seem like it could cover their costs? make sure to use concepts from either of the following topics (minimum of two from the list provided rest may be from own knowledge): externalities, public goods and common resources, understanding costs, business behaviour and businesses in competitive markets.arrow_forward
- What is a negative feedback loop? Give an example of a negative feedback loop within the real estate system shown in Exhibit 2-2.arrow_forwardDistinguish between accounting profit, economic profit, and normal profit. Does accounting profit or economic profit determine how entrepreneurs allocate resources between different business ventures? Explain.arrow_forwardSuppose Yamahonda, a Japanese-owned motorcycle manufacturer, builds a production plant in Alabama.arrow_forward
- For an increase in output, average costs change by more in the short run than in the long run, but for a decrease in output, the opposite is true. Explain why the above statement is True, False, or Uncertain according to economic principles. Use diagrams where appropriate.arrow_forwardPART B - You own a printing firm. Two of your senior managers provide you with advice. The first manager states that your company is losing money for every unit that is printed. To minimize losses, she advises that you reduce your production levels. The second manager states that if your firm sells some more units, the price will cover your increase in costs. In order to reduce losses, the second manager recommends that you should increase production. Explain which manager is correct and who is offering the correct advice?arrow_forwardSuppose your current job pays you $300,000 a year. However, you are considering starting your own company. Based upon your research, you estimate your first year total revenue to be $7,500,000. There are however several costs of running the company during this first year, such as the cost of materials which will equal $2,750,000, employees who will receive in total $1,500,000, utilities which will cost $1,200,000, and rent that will be paid to the landlord that equals $1,800,000. A. solve for both your accounting profit and economic profit during this first year. B. based upon these profit values, state whether you are better off starting this company or staying in your current job.arrow_forward
- i need answer 5 upvotesarrow_forwardDistinguish among accounting profit, economic profit, and normal profit. Does accounting profit or economic profit determine how entrepreneurs allocate resources between different business ventures? Explain.arrow_forwardWhen thinking about cost analysis in Microeconomics, what are the real-world problems that occur when applying theories of scale? Describe and give an example of each.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you