Charles has decided to open a lawn-mowing company. To do so, he purchases mowing equipment for $7,000, buysgasoline ($1.70 in gas is required to mow each yard), and pays a helper $10.00 per yard. Prior to opening the lawncompany, Charles earned $3,000 as a lifeguard at the neighborhood swimming pool. Assume the money he used topurchase the mowing equipment could otherwise have earned 5 percent per year in the bank and that the mowingequipment depreciates at 20 percent per year. Charles plans to mow 500 yards per year.What is Charles's implicit cost of production?Charles's implicit cost of production is $per year. (Enter your response as an integer.)

Implicit cost refers to the opportunity cost of using the own resources of entrepreneurs in…

Answered: What is Charles's implicit cost of…

What is Charles's implicit cost of production? Charles's implicit cost of production is $ per year. (Enter your response as an integer.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Economist of the Ville's Corporation has estimated the company's cost function using time series…

A: A monopoly is a market structure where a single seller (or a small group acting as one) has…

Q: Suppose the production function is q = 6L0.60K0.90. Determine the long-run capital- to-labor ratio…

A: At optimum where production is maximised, marginal rate of technical substitution equals price ratio…

Q: None

A: The production function is given by: Q = a * K^0.6 * L^0.4We know the costs for capital (K) and…

Q: If a firm has economies of scale, it must have increasing returns to scale. True or false? PLEASE…

A: Economies of scale means reducing production cost by increasing output at a large scale.

Q: When a firm is using a technically efficient input combination, the firm is also producing in an…

A: False statement

Q: Cost minimization when output is unknown an total costs are known. A factory that you are managing…

A: Given information: Q = 2K0.5L0.5 ----------> Production function…

Q: charlie is running a coffe shop and are currently selling 200 coffees. it cost them 2,0000 to hire a…

A: Fixed cost is the part of total cost that does not depend on output produced. It remains fixed even…

Q: Please choose two topics, one from Technical economies of scale and one from Pecuniary economies of…

A: Economies of scale are cost benefits that organizations gain when production becomes more efficient.…

Q: What do you mean by 'production function"?

A: A production function is an economic concept that represents the relationship between inputs and…

Q: Discuss how the marginal cost declines as the marginal product of a variable input increases. Please…

A: Total revenue is the total value of the commodities produced and sold in equilibrium. Economic costs…

Q: Consider the production function Q = 32K L (a) By dividing by L, find the Average Product of Labour…

A: The production function is the combinations of the labor and capital which are required to produce…

Q: Suppose a pizza parlor has the following production costs: $2.00 in labor per pizza, $1.00 in…

A: Variable cost is that cost that varies with the change in production level. Hence, the variable cost…

Q: Complete the following table, which shows the amount of ore produced (measured in tons) when various…

A: Total product is the total amount manufactured per a set of resources, average product is the…

Q: Suppose a pizza parlor has the following production costs: $2.00 in labor per pizza, $3.00 in…

A: Fixed Cost is constant at all units of output produced. Vraiable Cost changes as the output…

Q: Why does total cost increase faster as output increases?

A: A producer has to incur various types of costs in order to produce goods and services. This includes…

Q: A firm uses the inputs of Iron and labor to produce Cars. Suppose that the quantity of labor is…

A: Marginal product is the amount by which production of a commodity changes from employing more unit…

Q: When the average cost of producing each individual unit declines as total output increases is…

A: Production function shows the relationship between inputs and output. It reflects how changes in…

Q: Mr Han Cook says that marginal cost is just a funny name for average total cost. What do you think…

A: The marginal cost of production is the difference in total production costs that results from…

Q: a. Graphically illustrate this situation on a graph using isoquants and isocost lines. Explain…

A: Solution a:For the given graph a, the the labor is 160 units and capital is 5 units. The labor input…

Q: Suppose that you are the Production Manager of Mini Me, Inc., and you have estimated the…

A: The marginal product of labor (or MPL) refers to a company's increase in total production when one…

Q: Imagine you are running a business that processes horticultural product, and is currently producing…

A: 1) This offer will be accepted as the total revenue is greater than the total variable cost.

Q: A firm has the following production function: Q=f (L/K). It must pay $20 per hour of labor and rents…

A: Figure -1 shows the AVC, AFC, ATC and MC curve as follows:

Q: Part 1 of 2 40%, 2 of 5 points Points: 0 of 1 Save The marginal cost of a product can be thought of…

A: To minimize the marginal cost of producing digital cameras, we need to find the minimum point of the…

Q: If a firm has economies of scale, it must have increasing returns to scale. True or false?

A: Economies of scale refers to one of the competitive advantages that allow a firm to capture most of…

Q: Suppose that a rock star gives concerts. The production function of the concert is the following:…

A: To answer this question we are going to solve for total cost function and condition for optimally.

Q: For each of the production functions below, find the marginal products of both inputs, and indicate…

A: A brief introduction to the production function: A production function portrays the functional…

Q: A firm's production function is given by y(K, L) = 2√(KL) or 2(KL).5 (2 times the square root of the…

A: The Marginal Product of Labor (MPL) represents the change in output resulting from employing an…

Q: Is total cost 0 when the level of production is 0?

A: # We know that total cost is the sum of total fixed cost and total variable cost.

Q: Suppose a pizza parlor has the following production costs: $3.00 in labor per pizza, $4.00 in…

A: Variable cost is the cost that varies with the change in production level. So, the variable cost…

Q: Show using math and logic that for constant returns to scale production functions, MRTS between…

A: Production function and productivity: The production function determines all the input bundles that…

Q: A firm has the following production function: y = f(x) where y is the output and x is the input. If…

A: ANS AP is the amount of output (o/p) per unit of labor. It is given by the following formula: AP =…

Q: Ikea Inc., a home remodeling business. The number of square feet they can remodel in a day is…

A: The optimal combination of inputs is where the ratio of their MPs (marginal product) is equal to the…

Q: Suppose a pizza parlor has the following production costs: $3.00 in labor per pizza, $2.00 in…

A: Variable cost is that cost that varies with the change in production level. Hence, the variable cost…

Q: . Apple uses labour and machines to produce iPhones according to the production f y = L&M, where L…

A: We have the following two equations:y = L1/4M1/4 -----------> eq(1)and L =4M ------------->…

Q: how much were implicit costs

A: Profits refers to the income earned by the firm after accounting for all the expenses. These…

Q: Discuss the main feature behind the long run average cost curve in terms of usage of input.

A: In the long run , all factors are variable and nothing is fixed.The long-run average cost curve…

Question

Charles has decided to open a lawn-mowing company. To do so, he purchases mowing equipment for $7,000, buys
gasoline ($1.70 in gas is required to mow each yard), and pays a helper $10.00 per yard. Prior to opening the lawn
company, Charles earned $3,000 as a lifeguard at the neighborhood swimming pool. Assume the money he used to
purchase the mowing equipment could otherwise have earned 5 percent per year in the bank and that the mowing
equipment depreciates at 20 percent per year. Charles plans to mow 500 yards per year.
What is Charles's implicit cost of production?
Charles's implicit cost of production is $
per year. (Enter your response as an integer.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Definition of implicit cost:

VIEW

Step 2: Calculation of implicit cost:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

If the cost of an oven is $500, what is the marginal product per dollar spent on capital for the second oven? Read again before you answer. Labor Total Product Capital (ovens) (workers) (cakes) 8 6,000 8 10,000 8 13,000 Type your numeric answer and submit 123
2
A small clothing manufacturer employs a production method that is approximated by the following production function: q=12KL², where L measures the number of labor hours and K measures the number of rental hours for the machines used in the clothing construction process. Does this production process exhibit increasing, decreasing, or constant returns to scale? Briefly explain your answer. The hourly wage rate for workers at this company is $15; and the rental cost on the machines is $75 per hour. The company has a total budget of $3,150 that it can allocate to cover weekly production costs. The goal of the company's owner is to maximize their output, subject to the constraint of their production budget. Determine the output-maximizing levels of labor and capital the owner will employ.
What is the distinction between the laws and of returns and the returns to scale?
Suppose a pizza parlor has the following production costs: $5.00 in labor per pizza, $3.00 in ingredients per pizza, $0.20 in electricity per pizza, $1,500 in restaurant rent per month, and $250 in insurance per month. Assume the pizza parlor produces 1,000 pizzas per month. What is the variable cost of production (per month)? The variable cost of production is $ (Enter your response as an integer.) What is the fixed cost of production (per month)? The fixed cost of production is $ ☐. (Enter your response as an integer.)
What are some reasons we might see increasing returns to scale?
Introduction to Calculus in Economics (continued): In the previous Problem Set question, we started looking at the cost function C (æ), the cost of a firm producing z items. An important microeconomics concept is the marginal cost, defined in (non- mathematical introductory) economics as the cost of producing one additional item. If the current production level is æ items with cost C (z), then the cost of computing h additionial (C(z+h)-C(z)) items is C (z + h). The average cost of those h items is . As we analyze the cost of just the last item produced, this can be made into a mathematical model by taking the limit as h → 0, i.e. the derivative C' (z). Use this function in the model below for the Marginal Cost function MC (x). Problem Set question: The cost, in dollars, of producing z units of a certain item is given by C (z) = 0.02a3 – 10z + 450. (a) Find the marginal cost function. MC (z) (b) Find the marginal cost when 50 units of the item are produced. The marginal cost when 50…
Please answer fast please arjent help please ASAP pls answer fast
Typed plzzzzzx and Asap I vll upvote
The additional cost of producing one more unit of output is calicu
The following table depicts the number of grapes that can be picked in an hour with varying amounts of labor: Number of pickers (per hour) 1 2 3 4 5 6 7 8Output of grapes (in flats) 10 28 43 54 61 64 65 61Calculate marginal physical product (MPP) and then graph the total product (output) and MPP curves.
2. Inputs and outputs Bob's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Bob's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Bob signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Bob's kitchen cannot fit more than three ovens, Bob cannot change the number of ovens he uses in his production of pizzas in the short run. However, Bob's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Bob lets them know how many workers he needs for each day of the week. In the short run, these workers are inputs, and the ovens are inputs. Bob's daily production schedule is presented in the following table. Fill in the blanks to complete the Marginal Product of Labor column for each worker. Labor Output (Pizzas) Marginal Product of Labor (Pizzas) (Number of workers) 0 70 2 120 3 160…