Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 12, Problem 1PA
To determine
Fixed cost, variable cost, total cost,
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This chapter discusses many types of costs:opportunity cost, total cost, fixed cost, variable cost,average total cost, and marginal cost. Fill in the typeof cost that best completes each sentence:a. What you give up in taking some action is calledthe _________.b. _________ is falling when marginal cost is below itand rising when marginal cost is above it.c. A cost that does not depend on the quantityproduced is a(n) _________.d. In the ice-cream industry in the short run,_________ includes the cost of cream and sugarbut not the cost of the factory.e. Profits equal total revenue minus _________.f. The cost of producing an extra unit of output isthe _________.
Please define total cost, average total cost, and marginal cost. Explaine how these terms are related?
Define total cost, average total cost, and marginal cost. How are they related?
Chapter 12 Solutions
Essentials of Economics (MindTap Course List)
Ch. 12.1 - Prob. 1QQCh. 12.2 - Prob. 2QQCh. 12.3 - Prob. 3QQCh. 12.4 - Prob. 4QQCh. 12 - Prob. 1CQQCh. 12 - Prob. 2CQQCh. 12 - Prob. 3CQQCh. 12 - Prob. 4CQQCh. 12 - Prob. 5CQQCh. 12 - Prob. 6CQQ
Ch. 12 - Prob. 1QRCh. 12 - Prob. 2QRCh. 12 - Prob. 3QRCh. 12 - Prob. 4QRCh. 12 - Prob. 5QRCh. 12 - Prob. 6QRCh. 12 - Prob. 7QRCh. 12 - Prob. 8QRCh. 12 - Prob. 1PACh. 12 - Prob. 2PACh. 12 - Prob. 3PACh. 12 - Prob. 4PACh. 12 - Prob. 5PACh. 12 - Prob. 6PACh. 12 - Prob. 7PACh. 12 - Prob. 8PACh. 12 - Prob. 9PACh. 12 - Prob. 10PA
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- Would you consider an interest payment on a loan to a film an explicit or implicit cost?arrow_forwardc. How does fixed cost affect marginal cost? Why is this relationship important?arrow_forward1. Why do marginal costs tend to rise, and marginal benefits tend to fall? Explain. 2. Is it possible to avoid Diminishing Marginal Return? Why? Explain 3. Suppose that the Law of Diminishing Returns sets in immediately (that is, there is no range of output over which the Division of Labor holds). What would the short run marginal cost, average cost, and average variable cost curves look like? Explain.arrow_forward
- Use the following two statements to answer this question: 1. The average cost curve and the average variable cost curve reach their minima at the same level of output. II. The average cost curve and the marginal cost curve reach their minima at the same level of output. Both I and II are false. I is true, and II is false. O Both I and II are true. Olis false, and II is true.arrow_forwardQuestion 13 of 15 Production and Costs: End of Chapter Problems 12. Consider the relationship between average and marginal values. a. Suppose a basketball player is currently averaging 18 points per game but then, in her next game, scores 20 points. As a result of her marginal score of her average score will b. If marginal cost is less than average total cost, then average total cost is Therefore, when the marginal cost curve lies below the average total cost curve, the average total cost curve must be c. If marginal cost is greater than average total cost, then average total cost is Therefore, when the marginal cost curve lies above the average total cost curve, the average total cost curve must be Question Source: Chiang 4e - Economics Principles For A Changing World Publisher: Worth Publishers a 8:42 PM 36 32°F A O i I E 4) 12/8/2021 12arrow_forwardHow do we calculate each of the following: marginal cost, average total cost, and average variable cost?arrow_forward
- 4. What is the significance of the point where the marginal cost curve intersects the average total cost curve? Provide diagrams with your explanation.arrow_forwardJane’s Juice Bar has the following cost schedules:a. Calculate average variable cost, average total cost, and marginal cost for eachquantity.b. Graph all three curves. What is the relationship between the marginal-cost curveand the average-total-cost curve? Between the marginal-cost curve and the averagevariable-cost curve? Explain.arrow_forwardHow would each of the following affect average total cost, average variable cost, and marginal... Question: How would each of the following affect average total cost, average variable cost, and marginal cost? A. An increase in the cost of the lease of the firm's building. B. A reduction in the price of electricity. C. A reduction in wages. D. A change in the salary of the president of the company.arrow_forward
- 6. Why does Marginal Cost rise?arrow_forwardWhen thinking about cost analysis in Microeconomics, what are the real-world problems that occur when applying theories of scale? Describe and give an example of each.arrow_forward1. Which of the following is an implicit cost? A. The $100,000 the firms pay a person in salary to work as a manager for verizon wireless. B. Paying $1,000 rent to a mall to run a video game business. C. You forgo a $60,000 a year salary working as a manager of plumbing business so you can own your own plumbing business. 2. Ralph owns a small pizza restaurant where he works full time in the kitchen. His total revenue is $100,000 a year, and his rent is $36,000 a year. He pays his one employee $24,000 a year, and the cost of ingredients and overhead averages $60,000 a year. Also, Ralph forgoes $35,000 per year as the manager of a competing pizza restaurant nearby. His economic profit for the year was: A. $34,000 B. $55,000 C, $20,000 D. -$55,000 E. -$20,000 3. If you are charging $100 for skis and you sell 2,000 skis in a year. The explicit costs for the ski business, including insurance, taxes and paying wages to employees, equals $300,000, while the implicit cost of the ski business…arrow_forward
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