Suppose that a firm produces 100 units a month and sells them all for $5 each. The explict costs of production are $200 and the implicit costs of production are $250. Based on this information, the firm has an accounting profit of ___________ and an economic profit of ___________. a. $450; $300 b. $300; $50 c. $50; $300 d. $300; $45.
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Suppose that a firm produces 100 units a month and sells them all for $5 each. The explict costs of production are $200 and the implicit costs of production are $250. Based on this information, the firm has an accounting profit of ___________ and an economic profit of ___________.
| a. |
$450; $300 |
|
| b. |
$300; $50 |
|
| c. |
$50; $300 |
|
| d. |
$300; $45. |
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- 8. siuppose that the manager of a firm operating in a competitive market has estimated the firm's average variable cost function to be: AVC= 18-0.3Q Total fixed cost is $60 and the forecasted price of the firm's product is $12. 79 a. What is the corresponding marginal cost function? b. At what output is AVC at its minimum? C. How much outputs should the firm produce? d. How much profit or loss will the firm earn?,Suppose that a small family farm sold its output for $100,000 in a given year. The family spent $25,000 on fuel, $40,000 on seed, fertilizer, and pesticides, and $25,000 on equipment, including maintenance. The family members could have earned $20,000 working at other occupations What is the accounting profit for the family farm?Refer to Table 13-1. What is the average total cost of producing one widget? b. $15 a. S1 c. $16 d. $22 Refer to Table 13-1. What is the marginal cost of producing the sixth widget? a. $1.00 b. $3.50 c. $5.00 d. $6.00 Refer to Table 13-1. What is the average variable cost of producing four widgets? a. $2.00 b. $2.50 c. $3.33 d. $5.00 Refer to Table 13-1. What is the marginal cost of producing the first widget? a. $0 b. $1.00 c. $10.25 d. $11.00 Refer to Table 13-1. What is the variable cost of producing zero widgets? a. $0 b. $1.00 c. $10.25 d. $11.00 Refer to Table 13-1. What is the average fixed cost of producing five widgets? a. $1 b. $2 c. $3 d. $4 Refer to Table 13-1. What is the fixed cost of producing three widgets? a. $0 b. S1 c. $15 d. $18 Refer to Table 13-1. What is the variable cost of producing five widgets? a. $13.00 b. $14.00 c. $15.00 d. $16.00
- 1) In short, what does the production function describe? A .how a firm maximizes profits. B. how a firm turns inputs into output. C. the minimal cost of producing a given level of output. D. the relationship between cost and output. 2)What is the significance of the point at which Marginal Revenue and Marginal Cost curves intersect on a graph? A. total revenue is equal to variable cost. B. total revenue is equal to fixed cost. C. total revenue is equal to total cost. D. profit is maximized.10. Suppose a firm must pay an annual tax, which is a fixed sum, independent of whether itproduces any output.a. How does this tax affect the firm’s fixed, marginal, and average costs?b. Now suppose the firm is charged a tax that is proportional to the number of items itproduces. Again, how does this tax affect the firm’s fixed, marginal, and average costs?KK Enterprises' average total cost curve (ATC) has shifted up, but its average variable cost curve (AVC) and marginal cost curve (MC) haven't changed. Which of the following would cause the change in ATC, but not affect AVC or MC ? Select one: O a. a tax on a variable cost of production O b. an improvement in productivity Ос. a decline in productivity O d. a tax on a fixed cost of production
- 7. An economist estimated that the cost function of a single product firm is given by C (Q) = 100 +25Q+40Q2+2Q3 Based on this information, determine the followings. a. The fixed cost of producing 8 units of output b. The variable cost of producing 8 units of output c. The total cost of producing 8 units of output d. The average fixed cost of producing 8 units of output e. The average variable cost of producing 8 units of output f. The average total cost of producing 8 units of output g. The marginal cost when Q=8Suppose that a firm produces 200,000 units a year and sells them all for $20 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm has an accounting profit of: Select one: O A. $2,200,000 B. $2,500,000 O c. $3,700,000 O D. $4,000,000a. Why will firms in most markets be located at or close to the bottom of the longrun average cost curve? b. Distinguish between implicit and explicit costs. How is it possible to havepositive accounting profit and negative economic profit concurrently? c. Distinguish between economies of scale and constant returns to scale. What shape will the long-run average cost curve have for economies of scale andconstant returns to scale. d. What is the difference between production in the short run and production in the long run? Explain the shape of the long-run cost curve in relation to shortrun cost curves?
- 5. Consider the cost for a firm as described by the function: 3000 C(q) = 200 + q². 21 a. What are the fixed cost and variable cost function? b. Derive functions that describe the average cost and the marginal cost of production? c. If the average cost is $300 per unit of output, and 950 units of output are produced what is the cost of production? Show your work.1. Which statement must be false?a) A firm with constant returns to scale in production will not have fixed costs.b) When a firm has increasing returns to scale, the upward sloping marginal cost curve lies above the average cost curve.c) All firms face diminishing returns to scale when they have a high output.d) When a firm produces the output which minimises average cost, marginal cost and average cost will be equal. 2. Which of the following statements about the relationship between marginal revenue, price, and the price elasticity of demand, is true?a) A perfectly elastic demand curve will be vertical, showing that the firm sells a fixed output at all prices.b) The more inelastic the demand curve, the flatter it will be where it meets the price (vertical) axis.c) If the price elasticity of demand PED = -1 at all points on a demand curve, then the firm can choose any level of output, and earn the same revenue.d) When a monopoly maximises its profits, demand for its output will be…Question 5 If a firm earns an accounting profit of $20 million and has implicit costs of $6 million, what is the firm's economic profit? $26 million. O $14 million. $22 million. O $20 million.