EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Question
Chapter 8, Problem 9SP
To determine
Identify the problem that arises when calculating the profit.
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Question 8 page 28 Janet spends $20,000 per
year on painting supplies and storage space. She
recently received two job offers from a famous
marketing firm- one offer were for $100,000 per
year, and the other was for $90,000. However, she
turned both jobs down to continue a painting
career. If Janet sells 25 paintings per year at a price
of $8,000 each: a. What are her accounting
profits? Show your steps leading to your answer b.
What are her economic profits? Show your work!
Use the accompanying graph to answer the following questions. Assume the company makes 30,000 parts per month of Product A and 17,500 parts per month of Product B.
Click the icon to view the provided graph.
(a) Which Product has the higher variable cost, and what is this value in units of dollars per part?
has the higher variable cost. This value is $/part. (Type an integer or a decimal. Round your answer to two decimal places.)
More Info
Total Cost or Revenue [$] Milions
$6-
$5-
$4-
$3-
FA
$0-
O.
0
10
- Product A Total Cost
- Product B Total Cost
Product A Revenue
Product B Revenue
G1
A
20
30
G
T
40
Time (t) [months]
Print
50
Done
60
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...
70
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o
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Janet spends $20,000 per
year on painting supplies and storage space. She
recently received two job offers from a famous
marketing firm- one offer were for $100,000 per
year, and the other was for $90,000. However, she
turned both jobs down to continue a painting
career. If Janet sells 25 paintings per year at a price
of $8,000 each: a. What are her accounting
profits? Show your steps leading to your answer b.
What are her economic profits
Chapter 8 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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- The following table shows a company's total cost of production at various production quantities. Fill in the remaining cells of the table. (Note: If a value is a decimal, round to the nearest integer.) Average Fixed Cost Average Total Cost Fixed Variable Total Marginal Average Variable Quantity Cost Cost Cost Cost Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 150 150 1 150 60 210 2 150 105 255 3 150 135 285 4 150 150 300 150 180 330 6. 150 240 390 7 150 345 495 150 495 645 9. 150 675 825 On the following graph, plot the company's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer: For example, the average total cost of producing one pair of boots is $210, so you should start your…arrow_forwardA firm had sales revenue of $942 million last year. It spent $463 million on labor, $88 million on capital and $162 million on materials. The firm's factory sits on land owned by the firm that could be rented out for $2 million per year. What was the firm's economic profit last year in millions of dollars? (Do not include the word "million" or the dollar symbol in your answer, just a number.)arrow_forwardQuestion 20 of 20 Reggie owns and operates a cheese shop in the village of Somerset. Although Reggie has a degree in mechanical engineering and could easily go to work for his brother's company earning $76000 a year, his true passion is for cheese. Consider the list of Reggie's revenue and expenses from last year. Please use the information provided to answer the questions. Revenue from 2010 $90000 Rent $18000 Equipment $6000 Supplies $3000 What is Reggie's accounting profit? What is Reggie's economic profit? -$13000 $63000 $3000 O -$13000 -$63000 $3000 $63000 -$63000arrow_forward
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