Microeconomics 20th Edition Community College of Philadelphia Custom
17th Edition
ISBN: 9781308150468
Author: McConnell
Publisher: MCG/CREATE
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Chapter 9, Problem 1RQ
To determine
Accounting and economic profit.
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6.Which of the following are short-run and which are long-run adjustments? LO3
a.Wendy’s builds a new restaurant.
b.Harley-Davidson Corporation hires 200 more production workers.
c.A farmer increases the amount of fertilizer used on his corn crop.
d.An Alcoa aluminum plant adds a third shift of workers.
8. Why can the distinction between fixed costs and variable costs be made in the short run? Classify the following as fixed or variable costs: advertising expenditures, fuel, interest on company-issued bonds, shipping charges, payments for raw materials, real estate taxes, executive salaries, insurance premiums, wage payments, sales taxes, and rental payments on leased office machinery. LO4
An economist estimated that the cost function of a single-product firm isC(Q) = 100 + 20Q + 15 Q^2+ 10 Q^3Based on this information, determine: (LO4, LO5)a. The fixed cost of producing 10 units of output.
Chapter 9 Solutions
Microeconomics 20th Edition Community College of Philadelphia Custom
Ch. 9.2 - Prob. 1QQCh. 9.2 - Prob. 2QQCh. 9.2 - Prob. 3QQCh. 9.2 - Prob. 4QQCh. 9.5 - Prob. 1QQCh. 9.5 - Prob. 2QQCh. 9.5 - Prob. 3QQCh. 9.5 - Prob. 4QQCh. 9.8 - Prob. 1QQCh. 9.8 - Prob. 2QQ
Ch. 9.8 - Prob. 3QQCh. 9.8 - Prob. 4QQCh. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 1RQCh. 9 - Which of the following are short-run and which are...Ch. 9 - Prob. 3RQCh. 9 - Indicate how each of the following would shift the...Ch. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4P
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- In the short run, the marginal cost of the first unit of output is $25, the marginal cost of producing producing the third unit of output is $14. The firm's total variable cost of producing three units of O a. $39. O b. $25 O c. $33.. O d. $57.arrow_forwardWhich of the following are short-run and which are long-run adjustments? LO9.1 a. Wendy’s builds a new restaurant. b. Harley-Davidson Corporation hires 200 more production workers. c. A farmer increases the amount of fertilizer used on his corn crop. d. An Alcoa aluminum plant adds a third shift of workers.arrow_forwardWhy would a firm be happy to earn zero economic profits? Because zero economic profit means that the firm earns Select one.O. enough in total revenues to pay for all the fixed cost and some but not all of the variable costs.O. enough in total revenues to pay for all the accounting costs but none of the opportunity costs.O. zero accounting profit.O. enough in total revenues to pay for all the accounting costs and all of the opportunity costs.arrow_forward
- Suppose that the pen-making industry is perfectly competitive. Also suppose that each current firm and any potential firms that might enter the industry all have identical cost curves, with minimum ATC = $1.25 per pen. If the market equilibrium price of pens is currently $1.50, what would you expect it to be in the long run? LO11.2 a. $0.25. b. $1.00. c. $1.25. d. $1.50.arrow_forwardMa2. Required: Question 3.(LO3 Apply) Simon Ltd is run by Simon Leather who makes leather belts for designers. He uses the finest Argentinean leather and needs highly trained machinists to make the belts up to the quality designers expect. His beits usually sell for £50 per item and use 0.2m² of leather and 30 minutes of labor. Simon Ltd has 5 staff. They work a standard 8-hour day, 5 days a week, 48 weeks of the year. They earn £15 per hour. Leather costs £20 per meter. Simon also has some variable overheads of £6 per unit. Fixed overheads are £28,800. a) Calculate the number of belts Simon will have to sell to break even. Simon decides to branch out and start to also sell handbags to the same market. The handbags sell for €250 each and use 1.5m² of leather with 1 hour of labor being required. Variable overheads are £20 per handbag. There has been a bad case of foot and mouth in Argentina. Simon can only use the leather he has currently being shipped to him for the next…arrow_forwardMarginal cost Average total cost Average variable cost Average fixed cost Total cost Variable cost Fixed cost Output Labor - - - - 60 0 $60 0 0 70 130 70 60 130 70$ $60 1 1 14 33.33 23.33 10 200 $140 $60 6 2 14 24.54 19.09 5.45 270 $210 $60 11 3 17.5 22.66 18.66 4 340 280$ $60 15 4 25.55 24.55 19.1 3.16 410 $350 $60 18 5 70 25.25 22.10 3.15 480 $420 $60 19 6 Draw the short run total cost curve (show the total cost, fixed cost, variable cost). Where the marginal cost and average total cost intercept? Explain the relationship between the marginal cost and the average total cost with the help of graph.arrow_forward
- Economics Now having some knowledge of perfect competition and how/why it's generally experienced only in commodity markets, and that's not an absolute, discuss why the market for housing -though competitive- doesn't function under the theory of perfect competition. Hint: take each of the tenets of perfect competition and ask yourselves (for example) "Are all house the same (homogenous)?"; "Do sellers face buyers with 'few' choices?" -get the idea? In essence, you're describing why real estate isn't perfectly competitive and how those characteristics we studied often do not apply. Enjoy the learning!arrow_forwardWith current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $ 40, $60, $60, and $20, respectively. Assume the firm can sell these 400 loaves at $ 2 per unit. 1). What is its total revenue? 2). What is its total cost? 3). What is the firm's profit or loss? The firm generates an economic ( choose one -a) loss, b) profit ) of...? 4). Will it continue to produce banana bread? ( Yes or No) 5). If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?arrow_forwardAverage total cost tells us the O 1) cost of the last unit of output, if total cost does not include a fixed cost component. 2) variable cost of a firm that is producing at least one unit of output. 3) O 4) total cost of the first unit of output, if total cost is divided evenly over all th units produced. cost of a typical unit of output, if total cost is divided evenly over all the uni produced.arrow_forward
- Refer to the table below. Quantity Cost (in dollars) Fixed Costs (in dollars) Total Costs (in dollars) Average Total Costs (in dollars per unit) Average Variable Costs (in dollars per unit) Marginal Costs (in dollars per unit) 0 0 40 40 - - - - - - 1 15 40 55 55 15 15 2 35 40 75 37.5 17.5 20 3 60 40 100 33.3 20 25 4 90 40 130 32.5 22.5 30 5 125 40 165 33 25 35 6 160 40 200 33.3 26.6 40 If this information were used to create a total cost graph, the curve should Question 6 options: begin at 40 on the vertical axis and slope upward. become steeper as quantity increases. become steeper due to diminishing returns. reflect all of the above.arrow_forwardA software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile devices. The firm estimates that when it comes to labor, MPL = 5 apps per month while PL = $1,000 per month. And when it comes to capital, MPC = 8 apps per month while PC = $1,000 per month. If the company wants to maximize its profits, it should: LO16.5 a. Increase labor while decreasing capital. b. Decrease labor while increasing capital. c. Keep the current amounts of capital and labor just as they are. d. None of the above.arrow_forwardYou are the manager of large farm located in Le Mars with 1,200 acres. Given the current recession, you have decided to diversify by producing both a corn & soybean. Based on corn price of $5.45 per bushel and soybean price of $14 per bushel, you expect to earn total revenue of $544,375 for both products. Min produce of 20,705 bushels of soybeans Using the Isorevenue , how many bushels of corn you will produce? From your answer to a) illustrate graphically the Isorevenue curve. Clearly identify horizontal and vertical axis on your grapharrow_forward
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