Next, fill in average total cost in the table. (Enter your responses as real numbers rounded to two decimal places.) Labor Capital Output Total Cost 1 0 $400 1 160 640 480 880 1 640 1,120 720 1,360 760 1,600 0-2 345 O 1 Average Total Cost $ 640

What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?

What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?

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 do we calculate each of the following: marginal cost, average total cost, and average variable cost?

What are explicit and implicit costs?

A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is 1,000. What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.

Compute the average total cost, average variable cost, and marginal cost of producing 50 and 72 haircuts. Draw the graph of line three curves between 60 and 72 haircuts.

What is die difference between accounting and economic profit?

What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?