Chapter13 (Microeconomics)
Julia's economic profits are
$125,000
Julia's accounting profit are
$135,000
Emily's total opportunity cost of capital is
$14,000
Julia's explicit cost are
$15,000
A firm's opportunity costs of production are equal to its
Explicit costs + implicit costs
Figure 13-10.The three average total cost curves on the diagram labeled ATC1, ATC2, and ATXMC3 most likely correspond to three different
Factory sizes
Table 13-10. The average variable cost of producing 240 units of output is
$ 0.38
Table 13-10.The average total cost of producing 240 units is
$0.44
Table 13-10. What is the marginal cost of producing 280 units of output?
$0.75
Julia's implicit cost are
$10,000
If Kevin's children run a lemonade stand for a day and sell 200 glasses of lemonade at $0.50 each, their total revenues are
$100
Katherine gives piano lessons for $20per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for $150 at the farmer's market. Katherine's accounting profits are
$100, and her economic profits are $0
Emily's annual explicit cost of capital is
$12,000
Emily's annual implicit cost of capital is
$2,000
Cindy's car wash has average variable cost of $2 and average total cost of $3 when it produces 100unit of output( car washes). The firms total variable cost is
$200
Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are
$25
Table 13-7What is total output when 1 worker is hired?
$40
Economist normally assume that the goal of a firm is to
Earn the profits as large as possible ,even if it means reducing output.
Suppose that a firm's long-run average total cost of producing televisions decreases as its produces between 10,000 and 20,000 televisions. For this range of output, the firms is experiencing
Economies of scale
Table 13-7What is total output when 5 worker is hired?
190
Table 13-7.What is the marginal product of the sixth workers?
25
Table13-7. At which number of workers does diminishing marginal product begin?
3
Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 18 bouquets per day. What is William's marginal product?
38 bouquets
Table 13-7.What is the marginal product of the third workers?
40
Table 13-10. What is the marginal product of the fourth worker?
40 units
Eldin is a house painter. He can paint three houses per week. He is considering hiring his friend Murphy. Murphy can paint five houses per week. What is the maximum total output possible if Eldin hires Murphy?
8 houses
Which of the following statement is not true?
Average fixed cost are constant.
Difference between accounting profits and economic profit is
Implicit cost
Total cost is the
Market value of the inputs a firm uses in production.
Economic profit is equal to total revenue minus the
Opportunity cost of production goods and services.
Figure 13-10. The firm experiences economies of scale if it changes its level of output from
Q1 to Q2
Figure 13-10. The firm experiences constant returns to scale if it changes its level of output from
Q2 to Q4
Figure 13-10. The firm experiences diseconomies of scale if it changes its level of output from
Q4 to Q5
A production function is a relationship between input and
Quantity of output
If a firm produces nothing, which of the following costs will be zero?
Variable cost
Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 12, Q = 122) and (L = 13, Q = 132). Then the marginal product of the 13th worker is a. 8 units of output. b. 10 units of output. c. 122 units of output. d. 132 units of output.
a. 8 units of output.
When adding another unit of labor leads to an increase in output that is smaller than the increases in output that resulted from adding previous units of labor, the firm is experiencing
diminishing marginal product
Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's
implicit costs
When a firm experiences constant returns to scale,
long-run average total cost is unchanged, even when output increases.