PRIN OF MICROECONOMICS
2nd Edition
ISBN: 9780393914085
Author: coppock
Publisher: Norton, W. W. & Company, Inc.
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Question
Chapter 8, Problem 5SP
(a)
To determine
Identify whether the statement is true or false.
(b)
To determine
Identify whether the statement, diminishing marginal product is a long-run constraint that prevents lower cost, is true or false.
(c)
To determine
Identify whether the statement, the MC curve intersects the
(d)
To determine
Identify whether the statement, the accounting profit is smaller than economic profit, is true or false.
(e)
To determine
Identify whether the statement, total cost divided by output is equal to marginal cost, is true or false.
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Check out a sample textbook solutionStudents have asked these similar questions
The vertical distance between ATC and AVC as output expands is aa. marginal costb. total fixed costc. average fixed cost d. economic profit per unitPlease, show your answer graphically.
When you calculate marginal costs, they should include:
SELECT THE CORRECT ANSWER
A.the market price of the product.
B.only variable costs.
C.both the variable and fixed costs.
D.only fixed costs.
Which of the following is considered when calculating
economic profit but not accounting profit?
a. implicit cost
b. explicit cost
c. total revenue
d.
marginal cost
e. All of the above are considered when calculating accounting
profit.
Knowledge Booster
Similar questions
- a. Calculate the marginal cost and average variable cost for each level of production. b. How much would the firm produce if it could sell its product for $5? For $7? For $10? c. Explain your answers. d. Assuming that its fixed cost is $3, calculate the firm's profit at each of the production levels determined in part (b).arrow_forwardThe vertical distance between ATC and AVC measures: a. marginal cost. b. total fixed cost. c. average fixed cost. d. economic profit per unit.arrow_forwardRob quit his $4,000/month coffee shop position and started an ice-cream business. Rob does not get paid a salary for running the ice-cream business. When calculating the economic profit of the ice-cream business, his old $4,000 coffee shop salary is Select one: a. counted as part of the total revenue. b. counted as part of the implicit costs. c. counted as part of the explicit costs. d. ignored.arrow_forward
- If the marginal cost is above the average cost at a certain level of production and the firmdecides to increase output, then:a. The average cost will increase but the marginal cost will decrease.b. Both the average and the marginal cost will increase.c. The average cost will increase but the average cost will decrease.d. Both the average and the marginal cost will decrease.arrow_forwardBall Bearings, Inc., faces costs of production as follows:a. Calculate the company’s average fixed cost, average variable cost, average total cost,and marginal cost at each level of production.b. The price of a case of ball bearings is $50. Seeing that he can’t make a profit, thechief executive officer (CEO) decides to shut down operations. What is the firm’sprofit/loss? Was this a wise decision? Explain.c. Vaguely remembering his introductory economics course, the chief financial officertells the CEO it is better to produce 1 case of ball bearings, because marginal revenueequals marginal cost at that quantity. What is the firm’s profit/loss at that level ofproduction? Was this the best decision? Explainarrow_forwardPlease answer all questions thank you. 1. When ONLY Total Costs (TC) are known, explain how to calculate each of the following: a. Fixed costs (FC) b. Variable costs (VC) c. Average variable costs (AVC) d. Average total costs (ATC) e. Average fixed costs (AFC) f. Marginal costs (MC)arrow_forward
- Which statement is true? Fixed costs a.do NOT exist in the long run. b.depend on the firm's level of output. c.are zero if the firm is producing nothing. d.are the difference between total costs and average variable costs.arrow_forward1) In short, what does the production function describe? A .how a firm maximizes profits. B. how a firm turns inputs into output. C. the minimal cost of producing a given level of output. D. the relationship between cost and output. 2)What is the significance of the point at which Marginal Revenue and Marginal Cost curves intersect on a graph? A. total revenue is equal to variable cost. B. total revenue is equal to fixed cost. C. total revenue is equal to total cost. D. profit is maximized.arrow_forwardWhat is accurate about calculating accounting profit? a) Includes implicit cost. Ob) Usually less than economic profit. Oc) Does not include all opportunity costs. d) Want to set total revenues equal to total costs.arrow_forward
- 31. Modeling in manufacturing. A manufacturer of golf clubs finds that the fixed costs are $5780 per week and the cost of producing each set of clubs is $73.00. Each set of clubs can be sold for $243.00. a. Write the revenue function. b. Write the cost function. c. Write the profit function. d. Find the break-even point.arrow_forwardQUESTION 4 Assume that there is an implicit cost. Which of the following must be true? a. Accounting Profit > Economic Profit b. Accounting Profit = Economic Profit c. Accounting Profit < Economic Profit d. Accounting Profit - Economic Profit = 0arrow_forwarda. Why will firms in most markets be located at or close to the bottom of the longrun average cost curve? b. Distinguish between implicit and explicit costs. How is it possible to havepositive accounting profit and negative economic profit concurrently? c. Distinguish between economies of scale and constant returns to scale. What shape will the long-run average cost curve have for economies of scale andconstant returns to scale. d. What is the difference between production in the short run and production in the long run? Explain the shape of the long-run cost curve in relation to shortrun cost curves?arrow_forward
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