QUESTION 8Assume Texas instruments company purchased inputs costing $15,000, paid wages to their workers $50,000 and paid $5,000 on transportation. The company owns the plantwhere they produce their output, calculators. The imputed rental value of that plant are is $10,000. What will be Texas instruments explicit cost?O $70,000O $55,000O $80,000O $15,000 QUESTION 2The reason why the average total cost curve is u shaped is becauseO in the beginning average fixed cost pulls it down and then average variable cost pulls it up.in the beginning average variable cost pulls it down and then average fixed cost pulls it up.O the firm produces less in the beginning but in large quantities later.O the firm produces large quantities in the beginning but less quantities later.

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Assume Texas instruments company purchased inputs costing $15,000, paid wages to their workers $50,000 and paid $5,000 on transportation. The company owns the plant where they produce their output, calculators. The imputed rental value of that plant are is $10,000. What will be Texas instruments explicit cost? O $70,000 O $55,000 O $80,000 O $15,000

Assume Texas instruments company purchased inputs costing $15,000, paid wages to their workers $50,000 and paid $5,000 on transportation. The company owns the plant where they produce their output, calculators. The imputed rental value of that plant are is $10,000. What will be Texas instruments explicit cost? O $70,000 O $55,000 O $80,000 O $15,000

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 33CTQ: Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then...

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Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
How does fixed cost affect marginal cost? Why is this relationship important?
Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?
Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?
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What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
What is a long-run average cost curve?
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