Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 5.2, Problem 2QQ
Define the
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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. $112,500.
Output TFC ($)
TVC ($)
TC ($)
(Q)
2
100
104
204
3
100
203
303
4
100
300
400
5
100
405
505
6
100
512
612
7
100
621
721
Given the information about short-run costs in the table above, we can conclude that the firm will minimize the average total cost of production when Q = (Round your response to
the nearest whole number.)
The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital. Assume that the wage per unit of labour is $20 and
the cost of the capital is $100.
Labour per unit of time
0
1
Total Output
0
25
T
2
3
4
5
75
137
212
267
The marginal product of labour is at its maximum when the firm changes the amount of labour hired from
○ A. 0 to 1 unit.
○ B. 3 to 4 units.
OC. 2 to 3 units.
OD. 1 to 2 units.
○ E. 4 to 5 units.
Chapter 5 Solutions
Principles of Economics (MindTap Course List)
Ch. 5.1 - Define the price elasticity of demand. Explain...Ch. 5.2 - Define the price elasticity of supply. Explain...Ch. 5.3 - Prob. 3QQCh. 5 - A life-saving medicine without any close...Ch. 5 - The price of a good rises from 8 to 12, and the...Ch. 5 - A linear, downward-sloping demand curve is a....Ch. 5 - Prob. 4CQQCh. 5 - An increase in the supply of a good will decrease...Ch. 5 - Over time, technological advance increases...Ch. 5 - Prob. 1QR
Ch. 5 - List and explain the four determinants of the...Ch. 5 - Prob. 3QRCh. 5 - Prob. 4QRCh. 5 - If demand is elastic, how will an increase in...Ch. 5 - What do we call a good with an income elasticity...Ch. 5 - How is the price elasticity of supply calculated?...Ch. 5 - If a fixed quantity of a good is available, and no...Ch. 5 - Prob. 9QRCh. 5 - Prob. 1PACh. 5 - Prob. 2PACh. 5 - Suppose the price elasticity of demand for heating...Ch. 5 - A price change causes the quantity demanded of a...Ch. 5 - Prob. 5PACh. 5 - The price of coffee rose sharply last month, while...Ch. 5 - Suppose that your demand schedule for pizza is as...Ch. 5 - The New York Times reported (Feb. 17, 1996) that...Ch. 5 - Prob. 9PACh. 5 - Prob. 10PACh. 5 - You are the curator of a museum. The museum is...Ch. 5 - Prob. 12PA
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