Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 3, Problem 5P
To determine
Identify the best choice of hour.
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To be efficient, outputs should be produced that minimize total cost. True or false
Which of the following is an example of an implicit cost associated with an action?
- the cost of materials in undertaking a new renovation on your home
-the hourly wage you could be earning instead of enjoying your leisure time
-the tuition fee that a student pays for a term of college
-the time a parent can't spend with their children because they are working
there could be more then one correct choice
At zero level of production, _______ cost is always zero
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- The weekly marginal cost of producing x pairs of tennis shoes is given by the following function, where C(x) is cost in dollars. C′(x)=15+500x+1 If the fixed costs are $4,000 per week, find the cost function. What is the average cost per pair of shoes if 1,000 pairs of shoes are produced each week?arrow_forwardIf marginal cost is greater than average total cost, then average total cost must be increasing. Group of answer choices True Falsearrow_forwardCalculus is a powerful tool used in economics. One of the initial applications areas is the study of a firm, a topic in microeconomics. An important function is the cost function function C(x), the cost of producing x items (of whatever they are selling). This question deals with just the cost function C(x). Problem Set question: The cost, in dollars, of producing x units of a certain item is given by C(x)=5x−4x−1−−−−√. Find the production level that minimizes the average cost per unit. The number of units that minimizes the average cost is .arrow_forward
- For the cost function C(Q) = 75 + 4Q + 2Q2, the marginal cost of producing 5 units of output is:arrow_forwardAt any quantity, when the marginal benefit equals the marginal cost, that quantity is said to bearrow_forwardThe average fixed cost curve will never intersect with either the horizontal or vertical axis.arrow_forward
- You have been invited by friends to fly to Germany for October fest next year. For international travel, you apply for a passport that costs $97 and is valid for 10 years. After you receive your passport, your travel companions decide to cancel the trip because of “insufficient funds.” You decide to also cancel your travel plans because traveling alone is no fun. Is your passport expense a sunk cost or an opportunity cost? Explain your answer.arrow_forwardExplain Implicit and Explicit cost with the help of suitable example?arrow_forwardWhich of the following is an example of an implicit cost? Group of answer choices A)Federal taxes paid by the firm. B)$25 hourly wage paid to a seasonal clerk that a firm employs on a contract basis. C)The $40,000 in rental income an entrepreneur no longer receives after converting the rental space to their new storefront. D)$60,000 spent to purchase the lumber needed to create a product.arrow_forward
- If b=0, what would happen to the total-cost and marginal-cost curves of C=C(Q)=aQ^3+bQ^2+cQ+d?arrow_forwardYou have just woken up and are trying to decide whether to attend an upcoming lecture. The following are the costs and benefits you are considering. Tuition is $7,000 per semester; Books are $500 per semester; Driving to class is $10; Wages earned if you went to work instead are $35; How much you value an extra hour of sleep = $25; The cost of tuition and books ___________ be included in your calculations because they are an example of ________________ costs. Group of answer choices A)should not; sunk B)should; sunK C)should; marginal D)should not; marginal E)should; opportunityarrow_forwardLabel each of the following as sunk cost, opportunity cost, or incremental costs and briefly explain why: (Chapter 2) You are deciding which car to buy. Car A is $24,000 and car B is $32,000. The difference in price is $8,000. What kind of cost does this represent? Answer: Your company invested $300,000 into a study to determine the feasibility of introducing a new product line into the business. The study recommended 2 mutually exclusive feasible alternatives. What kind of cost does the $300K represent? Answer: You have 2 alternatives for a $10,000 investment. Investment A provides a $500 return and investment B provides a $700 return. If you choose Alternative B, what does the $500 return from Alternative A represent? Answer:arrow_forward
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