The average fixed cost curve continually declines (as output rises) because:Total variable cost is constant as output risesTotal fixed cost is constant as output risesO Total fixed cost declines as output risesO Marginal cost rise as output risesNone of the above Zero economic profit is not as bad as it sounds because when the firm earns zero economic profit:O It earns enough revenue to cover both its explicit and implicit costsO It has been able to earn total revenue equal to price times quantity soldIt covers all of its explicit costs and at least half of its implicit costsO It is earning accounting profitO None of the above

Because total fixed cost is constant as output rises,therefore average fixed cost continually…

The average fixed cost curve continually declines (as output rises) because: O Total variable cost is constant as output rises Total fixed cost is constant as output rises Total fixed cost declines as output rises O Marginal cost rise as output rises None of the above

The average fixed cost curve continually declines (as output rises) because: O Total variable cost is constant as output rises Total fixed cost is constant as output rises Total fixed cost declines as output rises O Marginal cost rise as output rises None of the above

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 7PA

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A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.
What is the difference between accounting profit and economic profi? OA Economic profit subtracts both explicit and implicit costs from total revenue, while accounting proft only subtracts explicit costs. OB. Accounting profit only subtracts implicit costs from total revenue, while economic profit only subtracts explicit costs. OC Economic profit only subtracts implicit costs from total revenue, while accounting profit only subtracts explicit costs. OD. Accounting profit suberacts both explicit and implicit costs from total revenue, while economic profR only subtracts explicit costs
You learn that a firm's average total costs (ATC) and average variable costs (AVC) are exactly equal. What does that mean? O Marginal cost is zero O ATC and AVC must be equal to zero O Average fixed costs (AFC) are zero O Economic profit is positive O Economic profit is negative
What is the difference between accounting profit and economic prof? A Economic profit subtracts both explicit and implicit costs from total revenue, while acounting profit only subtracts explicit costs. OR Accounting proft only subtracts implicit costs from totsi revenue, while economic profit only subtracts explicit costs. OC Economic proft orly subtracts implicit costs from total revenue, while accounting profit only subtracts explicit costs. OD. Accounting proft suberacts both explicit and implicit costs from total revenue, while economic proft only subtracts explicit costs
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Isit possible for accounting profit to be positive and economic profit to be negative? OA Na, economic profit and accounting profit will always end up being the same. OB. No, economic profit must always be larger than accounting profit. OC Yes, this could ocour if axplicit costs were modest and implict costs were high. OD. Yos, this could occur if impiot costs were modest and explict costs were high.
A computer company produces affordable, easyto-use home computer systems and has fixed costs of$250. The marginal cost of producing computers is $700for the first computer, $250 for the second, $300 for thethird, $350 for the fourth, $400 for the fifth, $450 for thesixth, and $500 for the seventh.a. Create a table that shows the company’s output,total cost, marginal cost, average cost, variablecost, and average variable cost.b. At what price is the zero-profit point? At whatprice is the shutdown point?c. If the company sells the computers for $500, is itmaking a profit or a loss? How big is the profitor loss? Sketch a graph with AC, MC, and AVCcurves to illustrate your answer and show theprofit or loss.d. If the firm sells the computers for $300, is itmaking a profit or a loss? How big is the profitor loss? Sketch a graph with AC, MC, and AVCcurves to illustrate your answer and show theprofit or loss.
Under which of the folowing examples is t likaly that the accounting profit is positive and the economic profit is negative? OA Using a restaurant you purchased to sell Menican food instead of talian food. OR It you use a diamond mine as a touriet atraction instead of using it for mining. Oc Opering a bank branch near a university campus. OD. Such a scenario, where accounting cost is positive and economic profit is negafive, is not possibie.
Bob produces Blu-ray movies for sale, which requires a building and a machine that copies the original movie onto a Blu-ray. Bob rents a building for $60 per month and this is his fixed costs. His variable cost per month is given in the accompanying table. Quantity of Blu-rays Variable Cost 10 200 20 380 30 540 40 720 50 920 60 1140 70 1380 80 1640 Assume that Bob can only ptoduce the quantity listed in the table. Assume current market price is $21, what's Bob's profit? O 70 130 Need more information to tell.
The Production Process and Costs 6. A firm's fixed costs for 0 units of output and its average total cost of produc- ing different output levels are summarized in the table below. Complete the table to find the fixed cost, variable cost, total cost, average fixed cost, aver- age variable cost, and marginal cost at all relevant levels of output. Q 0 100 200 300 400 500 600 FC $10,000 VC TC AFC AVC ATC $200 125 133 1/3 150 200 250 193 MC
Which of the following is not included in total cost? Select one: O a cost of the product to the buyer O b. O C. variable costs explicit costs O d. implicit costs
conl This Question: 1 pt in M sign Hom e a The graph shows the average variable cost curve and average total cost curve for a firm that produces candles. Draw the firm's marginal cost curve. Label it. When the marginal cost of producing an output exceeds its average variable cost but is less than its average total cost, OA. total variable cost is at its maximum value OB. average variable cost is increasing while average total cost is decreasing OC. average fixed cost is increasing OD. both average variable cost and average total cost are increasing Click the graph, choose a tool in the palette and follow the instructions to create your graph. APR 97 36 7- 6- 5- Cost (dollars per candle) ATC AVC 10 20 15 Output (candles per day) >>> Draw only the objects specified in the question. 25 30