HW8

The cookie company in the mall hires workers to produce cookies. The workers are paid $75 per day, and the cost of renting the space in the mall is $250 per day. The fixed costs of production are

$250

Billy Bob runs a seafood restaurant. Last year he earned $50,000 in revenue. He had explicit costs of $20,000. Billy Bob could have made $30,000 working for the county and could have received an additional $20,000 if he rented out his building and equipment. Calculate Billy Bob's accounting profit.

$30,000

Billy Bob runs a seafood restaurant. Last year he earned $50,000 in revenue. He had explicit costs of $20,000. Billy Bob could have made $30,000 working for the county and could have received an additional $20,000 if he rented out his building and equipment. Calculate Billy Bob's economic profit.

-$20,000

Assume that a monopolist faces the demand schedule given below, and a constant marginal cost of $2 for each unit of output. To maximize profits, this monopolist would produce ____ units of output and charge a price of ____ per unit.

2 units; $5

Suppose the firm whose demand and cost curves are represented in the table below operates in a perfectly competitive market. What is the profit-maximizing output?

25

Compared to perfect competition, monopolies charge

A higher price

The table below lists costs for producing Big Macs, a product of McDonald's. Based on the table, what are total fixed costs associated with Big Mac production?

$100

A pizza business has the cost structure described below. The firm's fixed costs are $20 per day. What are the firm's average total costs at an output of 10 pizzas?

$12

The cookie company in the mall hires workers to produce cookies. The workers are paid $75 per day, and the cost of renting the space in the mall is $250 per day. If two workers are hired, the variable costs are

$150

Which of the following is an explicit cost for a business owner?

a worker's salary

For a perfectly competitive firm, marginal revenue is

equal to price

Compared to perfect competition, monopoly results in

fewer units produced and sold

Explicit costs are called _____ costs and implicit costs are _____ costs.

out-of-pocket; opportunity

In a perfectly competitive market, the price of the product is

set by market supply and demand.

Profits and losses are determined by

subtracting total costs from total revenue.

Laronda went into the business of producing and selling greeting cards. For this business, which of the following is likely to be a fixed cost?

the 6-month lease for the factory

A pizza business has the cost structure described below. The firm's fixed costs are $20 per day. What are the firm's average fixed costs at an output of five pizzas?

$4

A pizza business has the cost structure described below. The firm's fixed costs are $20 per day. What are the firm's marginal costs at an output of 35 pizzas?

$4.00

The cookie company in the mall hires workers to produce cookies. The workers are paid $75 per day, and the cost of renting the space in the mall is $250 per day. The total costs when three workers are hired is

$475

Billy Bob runs a seafood restaurant. Last year he earned $50,000 in revenue. He had explicit costs of $20,000. Billy Bob could have made $30,000 working for the county and could have received an additional $20,000 if he rented out his building and equipment. Calculate Billy Bob's implicit costs.

$50,000

A pizza business has the cost structure described below. The firm's fixed costs are $20 per day. What are the firm's average variable costs at an output of 25 pizzas?

$7.00

Using the table below, determine the quantity at which a monopolist will produce.

4

A local snow cone business sells snow cones in one size for $5. It has the following cost and output structure per hour. To maximize profit, the firm should produce how many snow cones per hour?

40

A semiprofessional baseball team near your town plays two home games each month at the local baseball park. They split the concessions 50/50 with the city, but keep revenue from ticket sales for themselves. The city charges the team $100 each month for the three-month season. The team pays the players and manager a total of $1,000 a month. The team charges $10 for each ticket, and the average customer spends $7 at the concession stand. In order to break even, how many tickets does the team need to sell for each game?

41

As a waiter you earn $60,000 per year, including tips. Someone offers you a new job as an economic consultant, which pays $100,000 per year. In order to be a consultant, you'll need to rent an office and purchase supplies and new computer equipment. We can conclude which of the following?

If the explicit cost for the consulting job is $25,000 per year, your economic profit is equal to $15,000.

To maximize profits, firms expand output until

MR = MC

The price of a competitive firm's product is $50 per unit. The firm currently has marginal cost equal to $40. To maximize profits this firm

should increase its output