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.