Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 23, Problem 1E
To determine
To calculate profit at each level of output.
Expert Solution & Answer
Explanation of Solution
Profit is calculated as total revenue minus total cost
i.e. Profit=TR-TC
| Total output | Price | Total cost (TC) | Total revenue (TR) | Profit=TR-TC |
| 0 | $1900 | $1000 | 0 | $-1000 |
| 1 | $1700 | $2000 | $1700 | $-300 |
| 2 | $1650 | $2800 | $3300 | $500 |
| 3 | $1600 | $3500 | $4800 | $1300 |
| 4 | $1550 | $4000 | $6200 | $2200 |
| 5 | $1500 | $4500 | $7500 | $3000 |
| 6 | $1450 | $5200 | $8700 | $3500 |
| 7 | $1400 | $6000 | $9800 | $3800 |
| 8 | $1350 | $7000 | $10800 | $3800 |
| 9 | $1300 | $9000 | $11700 | $2700 |
Economics Concept Introduction
Concept Introduction:
Total revenue:
Total receipts a seller can get by selling the goods.
Total cost:
Total expenses incurred for producing the goods.
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Students have asked these similar questions
Sue is a sole proprietor of her own sewing business. Revenues are $150,000 per year and raw material (cloth, thread) costs are $130,000 per year. Sue pays herself a salary of
$60,000 per year but gave up a job with a salary of $80,000 to run the business.
○ A. Her accounting profits are $0. Her economic profits are - $60,000.
○ B. Her accounting profits are $0. Her economic profits are - $40,000.
○ C. Her accounting profits are - $40,000. Her economic profits are - $60,000.
○ D. Her accounting profits are - $60,000. Her economic profits are -$40,000.
Select a number that describes the type of firm organization indicated.
Descriptions of Firm Organizations:
1. has one owner-manager who is personally responsible for all aspects of the business, including its debts
2. one type of partner takes part in managing the firm and is personally liable for the firm's actions and debts, and the other type of partner takes no part in the management of the
firm and risks only the money that they have invested
3. owners are not personally responsible for anything that is done in the name of the firm
4. owned by the government but is usually under the direction of a more or less independent, state-appointed board
5. established with the explicit objective of providing goods or services but only in a manner that just covers its costs
6. has two or more joint owners, each of whom is personally responsible for all of the partnership's debts
Type of Firm Organization
a. limited partnership
b. single proprietorship
c. corporation
Correct Number
The table below provides the total revenues and costs for a small landscaping company in a recent year.
Total Revenues ($)
250,000
Total Costs ($)
- wages and salaries
100,000
-risk-free return of 2% on owner's capital of $25,000
500
-interest on bank loan
1,000
- cost of supplies
27,000
- depreciation of capital equipment
8,000
- additional wages the owner could have earned in
next best alternative
30,000
-risk premium of 4% on owner's capital of $25,000
1,000
The economic profits for this firm are
○ A. $83,000.
B. $82,500.
OC. $114,000.
OD. $83,500.
○ E. $112,500.
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