Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Concept explainers
Question
Chapter 9, Problem 5DQ
To determine
Distinction between the variable cost and fixed cost.
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Complete the following table of short-run fixed costs. (Enter your responses rounded to two decimal places.)
Total Fixed Cost
(TFC)
$1,500
Output
(9)
1
2
3
4
5
1,500
1,500
1,500
1,500
Average Fixed Costs
(AFC)
$
Explain the meaning of fixed costs. Provide a few examples of firms' costs that are likely to be fixed in the short run. Describe what the graphs of both total fixed cost and average fixed cost would look like. What is the relationship between Average Total Cost, Average Variable Cost, and Average Fixed Cost? What costs are fixed over the long run?
QUESTION 2
The table below gives the short run production function for the firm, Jack's Moving Company.
Assume that 1 unit of labor costs the firm $150.00 per day and that total fixed cost is equal to $300.00 per day.
Fill in the missing values of the table.
*All answers should include a dollar sign, a comma to separate the thousands column from the hundreds column if needed, and should be
rounded to the nearest cent, for example: $905.23, $1,174.00, etc. Make sure to review the rules for rounding to the nearest cent in the
Videos for Appendix A.
Units of
labor per
day (L)
Tons of
furniture
moved per
Total Fixed Cost (TFC)
Total Variable Cost (TVC)
Total Cost (TC)
day (Q)
0
$300.00
$0.00
$300.00
0
2
2
3
59
24
4
12
5
14
9
15
Chapter 9 Solutions
Economics (Irwin Economics)
Ch. 9.2 - Prob. 1QQCh. 9.2 - Prob. 2QQCh. 9.2 - Prob. 3QQCh. 9.2 - Prob. 4QQCh. 9.5 - Prob. 1QQCh. 9.5 - Prob. 2QQCh. 9.5 - Prob. 3QQCh. 9.5 - Prob. 4QQCh. 9.8 - Prob. 1QQCh. 9.8 - Prob. 2QQ
Ch. 9.8 - Prob. 3QQCh. 9.8 - Prob. 4QQCh. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 1RQCh. 9 - Which of the following are short-run and which are...Ch. 9 - Prob. 3RQCh. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4P
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- The table below represents incomplete information on the short-run production costs for a firm, where: FC is fixed cost; TVC is total variable cost; TC is total cost; MC is marginal cost; and AFC, AVC, and ATC are average fixed, average variable, and average total cost, respectively. Based on the information provided in the table, complete the rest of the table. Note that values for FC, TVC, TC, AFC, AVC, and ATC should be placed on the same line as the corresponding quantity; values for MC should be placed between quantities. For example, the marginal cost of increasing output from 2 units to 3 units is $110, thus $110 is entered between Q=2 and Q=3 in the table. Find the quantity at which diminishing marginal returns set in. TVC TC Q 1 FC MC AFC AVC ATC 400 300 2 920 110 3 4 180 5 272arrow_forwardComplete the following table of various types of cost for a firm in the short run. Assume that Total Fixed Cost equals $100. Table relating Measures of Cost to level of Output Quantity of Output Total Variable Cost Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost 1 $20 2 $35 3 $45 4 $60 5 $80 6 $105 7 $140 8 $185 9 $250 10 $340 What do you notice about the shape of Average Fixed Cost that differs from the other per unit costs such as Average Variable Cost and Average Total Cost? What is the relationship between Marginal Cost and both Average Variable and Average Total Cost? Imagine yourself running a pizza restaurant over a short term horizon. Think about the following potential changes in your costs. For each, try to discern which would affect your fixed costs from those that are variable costs. Specifically, how…arrow_forwardThe following is a cost schedule for A & E Manufacturing Company Ltd for product X. Quantity (Q) Fixed Cost Variable Cost Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost 0 100 1 30 2 25 3 60 4 100 18 Required: Calculate the missing costs and complete the schedule. On one diagram, plot and label the Marginal Cost curve, the Average Fixed Cost curve, Average Variable Cost Curve and the Average Total Cost curve. Explain the relationship which exists between the Marginal Cost Curve and the Average Total Cost Curve. What accounts for the ‘U’ shape of the Average Total Cost Curve?arrow_forward
- fixed cost is the same at each output level except when no output is produced. when a firm produces no output,there are no fix cost. true or false? explainarrow_forwardThe WipeOut Ski Company manufactures skis for beginners. Fixed costs are $30. Fill in Table 7.16 for total cost, average variable cost, average total cost, and marginal cost. On two separate sets of axes, draw the Total Cost Curves (TC, TVC, TFC) and the Per-Unit Cost Curves (MC, ATC, AVC). (Please draw the picture) Note that there is no "inflection point" on these curves - why is that?arrow_forward
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