Word Bank Matching (Use the drop-down for each question. No words in the word bank are repeated in an answer): Explicit Cost; Implicit Cost; Accounting Profit; Economic Profit; Normal Profit; Variable Resource; Fixed Resource; Variable Cost; Fixed Cost; Marginal Product; Total Product; Law of Diminishing Marginal Returns; Short Run; Long Run; Economies of Scale; Diseconomies of Scale; Marginal Cost. Note: important terms for this chapter which are not covered below: Specialization; TC VC FC ATC AVC AFC. 1. Use this scenario to answer the bulleted points below: Sarai is starting a new business. She has to quit her old job of being an accountant which pays an annual salary of $80,000. The new job is a web-service accounting help center, where she helps to match accountants to potential clients. The cost of rent for her office space is an annualized $30,000, and the cost of computer servers (which do not need further purchases as output changes in the short run) are $15,000. Sarai also advertises on al billboard which costs $10,000. Sarai needs to pay for office supplies like paper, ink, and other miscellaneous items that are needed more when more output is produced, which cost $25,000. Sarai finally hires 4 workers at an annual salary of $50,000 each. Sarai's company produces 20,000 help-services for clients at a price of $20 per service. The office space would be an example of a [Select] $30,000 rent for the space is an example of a [Select] The annual salary of $80,000 is a good example of a(n) [Select] the cost of computer servers of $15,000 is a good example of a(n) [Select] because it IS a cost directly paid. because it isn't a cost directly paid to anyone, while o When taking into account revenue and costs, Sarai is making $120,000 of [Select] and $40,000 [Select] o The workers that Sarai hires are a good example of a [Select] [Select] Sarai's accounting job paid $120,000 instead of $80,000, then Sarai's new business would yield [Select] and the while the $50,000 per-worker salary is a good . If example of a o As Sarai hires more and more workers under the same limited office space, Sarai expects to see a decline in the marginal product of workers which is known as the [Select] workers' production is 300 client services per work-day, this is the [Select] of 5 workers. o If Sarai's hires a 5th worker who can produce an additional 40 client services per work-day, this is the [Select] of the 5th worker, and if all 5 o If the 20th client service unit costs $12 to produce, this is known as the [Select] production, which is called [Select] Some resources can be fixed in the [Select] must be variable in the [Select] o If Sarai's business expands enough, in the long run she might experience lower average cost as she ramps up production, which is called [Select] or experience higher average cost as she ramps up but all resources