Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
1. Explain the difference between explicit costs and implicit costs.
2. Explain the difference between economic profit and accounting profit.
3. What are the 2 variables that the Production Function is analyzing/graphing? Why does the production function diminish over time?
4. Give an example of a fixed cost and a variable cost.
5. How does fixed costs and variable cost change with increased production?
6. Why does Marginal Cost rise?
7. Why is the
8. Why is the Minimum Average Total Cost and Efficient Scale important?
9. What is the relationship between Marginal Cost and Average Total Cost?
10. Explain why economies of scale is important.
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