In economics, the cost of production is defined as the expenditures incurred to obtain the factors of production such as labor, land, and capital that are needed in the production process of a product. Explain the following in relation the total cost in economics i. A firm pays its accountant an annual allowance of $10,000. Is this an economic cost? Explain. ii. The owner of a small retail store does her own accounting work. How would you measure the opportunity cost of her work?

Q: How does a cost behave in response to a change in activity? Give an example?

A: Cost also changes with the change in the activity. There are two types of costs- fixed costs and…

Q: Explain why the fixed cost has no influence at all on marginal cost.

A: In the short run, a firm will have two types of cost: fixed cost and variable cost. Total variable…

Q: The following data refer to Questions 23 and 24 only. Number of workers Total Product Marginal…

A: Total product is the total output produced by a firm. Marginal product is the extra output produced…

Q: If the average-total-cost curve is falling, what is necessarily true of the marginal-cost curve? If…

A: Total Cost is equal to the sum of both fixed and variable costs. Fixed Cost remains fixed for all…

Q: If the marginal cost of production is greater than the average variable cost, what does this tell…

A: Variable costs are the ones which change with the change in the level of output, i.e., it is output…

Q: Give an example of an opportunity cost that an accountant would not count as a cost. Why would the…

A: Opportunity cost, in economics, is related to the concept of scarcity and represents the potential…

Q: Average cost curves (except for average fixed cost) tend to be U-shaped, decreasing and then…

A: Total Costs  = Variable costs + Fixed costs AC = AFC + AVC

Q: Discuss one or more examples of an opportunity cost an accountant might not count as a cost.  As…

A: Opportunity costs represent forgone benefits from a next best alternative.

Q: Average cost curves (except for average fixed cost) tends to be u-shaped , decreasing and then…

A: Marginal cost is nothing but the additional cost required to produce one extra unit while average…

Q: Marilyn opens an insurance brokerage. Which of the following is an example of her implicit cost?…

A: Opportunity cost: - opportunity cost is a forgone benefit that we could have earned by applying all…

Q: Draw the iso-cost line associated with an hourly budget of $1,000. b. What is the least-cost level…

A: Isocost curves are those curves that represent those combinations of inputs that can produce a given…

Q: Ebba Kantzen says the following: "I am currently producing 10,000 pizzas per month at a total cost…

A: Cost can be defined as a concept that shows the amount of expenditure and any other sacrifice such…

Q: Define total cost, average total cost, and marginal cost.  How are they related?

A: Total Cost (TC) is the cost of production of a good and it includes both the variable cost i.e. the…

Q: The table below provides information about the cost of inputs and value of output for the production…

A: To calculate the value added at each stage of production and the total contribution of the bike to…

Q: Why is economic cost known as opportunity cost? What are included in economic costs?

A: Opportunity cost refers to the cost of a foregone opportunity. The cost involved when an opportunity…

Q: You are told that the marginal cost of production is increasing. Is it possible to determine whether…

A: Marginal cost of production refers to the additional cost of producing one extra unit of output,…

Q: uestion 13 of 15 Production and Costs: End of Chapter Problems 12. Consider the relationship…

A: There is a significant relationship between marginal cost and average total cost as any change in…

Q: When thinking about cost analysis in Microeconomics, what are the real-world problems that occur…

A: Economies of scale are cost savings that can arise when a business expands the production scale and…

Q: PProblem 3-Page (174): The following table gives you information on the total cost of Mac's ice…

A: Here, the given table gives information about total cost of Mac's ice-cream production using which…

Q: What is direct cost? What is indirect cost? Provide detailed definitions and  example for both

A: The total cost of a product is generally categorized into direct and indirect costs.

Q: How do we calculate each of the following: marginal cost, average total cost, and average variable…

A: The total cost(TC)  is the production cost incurred on engaging various inputs i.e land, capital,…

Q: a.)Suppose that labor is the only variable input in the production process. If the marginal cost of…

A: Note: You have uploaded two questions at a time. Hence, we shall answer only the first one for you.…

Q: Explain why the marginal cost of production must increased if the marginal product of the marginal…

A: The marginal cost of production refers to the change in total cost due to produce an extra unit of…

Q: If the marginal cost is increasing, do you know whether average variable cost is increasing or…

A: Marginal cost is U shaped and average variable cost is also U shaped.

Q: Average cost curves (except for average fixed cost) tend to be U-shaped, decreasing and then…

A: Average cost is the per unit cost of production. it is the ratio of total cost and output.  Marginal…