ECON 10a Chapter Notes - Chapter 13: Marginal Cost, Variable Cost, Average Variable Cost

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cerisesnake319

3 Nov 2016

School

Brandeis University

Department

Economics

Course

ECON 10a

Professor

Coiner Harry( Michael)

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Document Summary

Some of the opportunity costs, such as the wages a firm pays its workers, are explicit. Other opportunity costs, such as the wages the firm owner gives up by working at the firm rather than taking another job, are implicit. A typical firm"s production function gets flatter as the quantity of an input increases, displaying the property of diminishing marginal product. As a result, a firm"s total cost curve gets steeper as the quantity produced rises. Fixed costs are costs that do not change when the firm alters the quantity of output produced. Mc = tc/ q: from a firm"s total cost, two related measures of cost are derived. Average total cost is total cost divided by the quantity of output. For a typical firm, marginal cost rises with the quantity of output. Average total cost first falls as output increases and then rises as output increases further.

Related Questions

1. When a profit-maximizing firm produces, they will be producing at that output at which marginal cost = marginal revenue:

all of the time
some of the time
on rare occasions
none of the time

2. Economics Profit is:

the same as accounting profit
sales minus explicit costs and implicit costs
sales minus variable costs and fixed costs
opportunity cost only

3. A market structure with so many firms that no one firm has any influence over price, and firms produce an identical product is called:

monopoly
oligopoly
perfect competition
monopolistic competition

4. Which of the following is NOT a characteristic of a perfectly competitive market?

identical products
perfect mobility
perfect knowledge
price maker

5. The demand curve in a perfectly competitive market is perfectly elastic.

true
false

emeraldwombat313

During a year of operation, a firm collects $175,000 in revenue and spends $80,000 on raw materials, labor expenses, utilities, and rent. The owners of the firm have provided $500,000 of their own money to the firm instead of investing the money and earning a 14 percent annual rate of return.

a). The explicit costs of the firm are $. The implicit costs are $. The total economic cost is $.

b). The firm's economic profit is $

c). The firm's accounting profit is $

d). If the owners could earn 20 percent annually on the money they have invested in the firm, the economic profit of the firm would be______ (when revenue is $175,000).

earnsacquire or deserve by one's efforts or actionsMore (Definitions, Synonyms, Translation)