Section B- SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. (3 points each) 1) Assume that an individual with an opportunity cost of time of $20 per hour has to choose between renting four apartments. The rents of the four apartments and the individual's monthly commuting time to work are shown in the following table. Calculate the direct cost, indirect cost, and total cost, that the individual will incur if she rents any of these apartments. Also, determine the apartment that is optimum for the individual. Monthly Commuting Time (hours) Rent ($) 2,800 2,200 1,500 1,400 Apartment 1 60 90 3. 120 150

Section B- SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. (3 points each) 1) Assume that an individual with an opportunity cost of time of $20 per hour has to choose between renting four apartments. The rents of the four apartments and the individual's monthly commuting time to work are shown in the following table. Calculate the direct cost, indirect cost, and total cost, that the individual will incur if she rents any of these apartments. Also, determine the apartment that is optimum for the individual. Monthly Commuting Time (hours) Rent ($) 2,800 2,200 1,500 1,400 Apartment 1 60 90 3. 120 150

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 3.7P

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10
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Monique has a flock of six chickens in her backyard that she initially bought for $6 each. Theflock currently lays 20 eggs per week, which Monique and her family consume at home, andher current cost of feed is $2 per week. Monique has a job that pays $8/hour with flexiblehours, but she is thinking of selling her chickens’ eggs to earn extra income. To start sellingeggs, she would need to increase production to 30 eggs per week. She can do this by increasingthe chickens’ feed to $3 per week and taking an hour off work each week to devote to chickenrearing. If the market price of her farm-fresh eggs is $1 per egg, what would be Monique’sweekly economic profits from selling her chickens’ eggs? (Select one from below) (a) −$9: This is her revenue minus her accounting cost.(b) −$1: This is her revenue minus her production cost.(c) $0: Eggs are a constant-cost market so producers must earn 0 profits.(d) $1: This is her revenue minus her economic cost.(e) $7: This is her revenue minus her…
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