ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
4th Edition
ISBN: 9781285423548
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 7, Problem 1.2PA
To determine
To Determine: The explicit or implicit cost in each case.
Concept Introduction:
A direct payment made to others in the course of running a business is called explicit cost. The cost that has already occurred but is not necessarily shown or reported as a separate expense is called implicit cost.
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18. Which would be an implicit cost for a firm? The cost of: A. Property insuranceB. Property tax C. Raw materialsD. Wages foregone by the owner of the firm
1. True or False: explain why your answer is true or false
a. We can expect the average cost curve of a software product downloadable in the internet to have no minimum point.
b. Decreasing returns to scale implies that production exhibits economies of scale.
c. Fixed costs tend to infinity when output is zero
d. While the distance between the total and variable cost curves does not change, the distance between the average total cost and the average variable cost curves decreases with increasing output.
e. In general, production can display diminishing returns in all variables but still display increasing returns to scale. Explain your answer.
Question 4.4. Which expression is another way of saying "marginal cost"?
Scarce resources
Additional cost
Opportunity cost
Unrecognized cost
Question 5.5. Which is not a factor of production?
Money
Land
Labor
Capital
Chapter 7 Solutions
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
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