Economic cost.

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Answer 1

Question

Chapter 7, Problem 1RQ

To determine

Economic cost.

Expert Solution & Answer

Explanation of Solution

An explicit cost is a direct payment made to others in the production process which is also used to calculate the economic cost and accounting cost. In the given case, a payment of an annual retainer of $10,000 to the accountant is a direct payment. Therefore, it can be considered as an explicit cost. Therefore, it can be considered as both an economic cost and an accounting cost because since the monetary transaction exists in this payment it is called an accounting cost, whereas by paying the annual retainer of $10,000, the firm purchases the service of the accountant. Thus, it is also a cost of economic resources. Hence, the payment of an annual retainer of $10,000 to the accountant can be considered as an economic cost.

Economics Concept Introduction

Economic cos t: An economic cost is a cost to a firm for utilizing economic resources in the production.

Accounting cost: An accounting cost is the actual expenses, plus depreciation charges for capital equipment.

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Tasks Exercise 1 Assess the following functions: 1. f(x)= x2+6x+2 2.f '(x)=10x-2x2+5 a. Find the stationary points. (5 marks) b. Determine whether the stationary point is a maximum or minimum. (5 marks) c. Draw the corresponding curves (5 marks)

Problem 2: The sales data over the last 10 years for the Acme Hardware Store are as follows: 2003 $230,000 2008 $526,000 2004 276,000 2009 605,000 2005 328,000 2010 690,000 2006 388,000 2011 779,000 2007 453,000 2012 873,000 1. Calculate the compound growth rate for the period of 2003 to 2012. 2. Based on your answer to part a, forecast sales for both 2013 and 2014. 3. Now calculate the compound growth rate for the period of 2007 to 2012. 1. Based on your answer to part e, forecast sales for both 2013 and 2014. 5. What is the major reason for the differences in your answers to parts b and d? If you were to make your own projections, what would you forecast? (Drawing a graph is very helpful.)

Answer 2

Question

Chapter 7, Problem 1RQ

To determine

Economic cost.

Expert Solution & Answer

Explanation of Solution

An explicit cost is a direct payment made to others in the production process which is also used to calculate the economic cost and accounting cost. In the given case, a payment of an annual retainer of $10,000 to the accountant is a direct payment. Therefore, it can be considered as an explicit cost. Therefore, it can be considered as both an economic cost and an accounting cost because since the monetary transaction exists in this payment it is called an accounting cost, whereas by paying the annual retainer of $10,000, the firm purchases the service of the accountant. Thus, it is also a cost of economic resources. Hence, the payment of an annual retainer of $10,000 to the accountant can be considered as an economic cost.

Economics Concept Introduction

Economic cos t: An economic cost is a cost to a firm for utilizing economic resources in the production.

Accounting cost: An accounting cost is the actual expenses, plus depreciation charges for capital equipment.

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Answer 3

Question

Chapter 7, Problem 1RQ

To determine

Economic cost.

Expert Solution & Answer

Explanation of Solution

An explicit cost is a direct payment made to others in the production process which is also used to calculate the economic cost and accounting cost. In the given case, a payment of an annual retainer of $10,000 to the accountant is a direct payment. Therefore, it can be considered as an explicit cost. Therefore, it can be considered as both an economic cost and an accounting cost because since the monetary transaction exists in this payment it is called an accounting cost, whereas by paying the annual retainer of $10,000, the firm purchases the service of the accountant. Thus, it is also a cost of economic resources. Hence, the payment of an annual retainer of $10,000 to the accountant can be considered as an economic cost.

Economics Concept Introduction

Economic cos t: An economic cost is a cost to a firm for utilizing economic resources in the production.

Accounting cost: An accounting cost is the actual expenses, plus depreciation charges for capital equipment.

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Answer 4

Question

Chapter 7, Problem 1RQ

To determine

Economic cost.

Expert Solution & Answer

Explanation of Solution

An explicit cost is a direct payment made to others in the production process which is also used to calculate the economic cost and accounting cost. In the given case, a payment of an annual retainer of $10,000 to the accountant is a direct payment. Therefore, it can be considered as an explicit cost. Therefore, it can be considered as both an economic cost and an accounting cost because since the monetary transaction exists in this payment it is called an accounting cost, whereas by paying the annual retainer of $10,000, the firm purchases the service of the accountant. Thus, it is also a cost of economic resources. Hence, the payment of an annual retainer of $10,000 to the accountant can be considered as an economic cost.

Economics Concept Introduction

Economic cos t: An economic cost is a cost to a firm for utilizing economic resources in the production.

Accounting cost: An accounting cost is the actual expenses, plus depreciation charges for capital equipment.

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Answer 5

Chapter 7, Problem 1RQ

To determine

Economic cost.

Expert Solution & Answer

Explanation of Solution

An explicit cost is a direct payment made to others in the production process which is also used to calculate the economic cost and accounting cost. In the given case, a payment of an annual retainer of $10,000 to the accountant is a direct payment. Therefore, it can be considered as an explicit cost. Therefore, it can be considered as both an economic cost and an accounting cost because since the monetary transaction exists in this payment it is called an accounting cost, whereas by paying the annual retainer of $10,000, the firm purchases the service of the accountant. Thus, it is also a cost of economic resources. Hence, the payment of an annual retainer of $10,000 to the accountant can be considered as an economic cost.

Economics Concept Introduction

Economic cos t: An economic cost is a cost to a firm for utilizing economic resources in the production.

Accounting cost: An accounting cost is the actual expenses, plus depreciation charges for capital equipment.

Answer 6

Chapter 7, Problem 1RQ

To determine

Economic cost.

Expert Solution & Answer

Explanation of Solution

An explicit cost is a direct payment made to others in the production process which is also used to calculate the economic cost and accounting cost. In the given case, a payment of an annual retainer of $10,000 to the accountant is a direct payment. Therefore, it can be considered as an explicit cost. Therefore, it can be considered as both an economic cost and an accounting cost because since the monetary transaction exists in this payment it is called an accounting cost, whereas by paying the annual retainer of $10,000, the firm purchases the service of the accountant. Thus, it is also a cost of economic resources. Hence, the payment of an annual retainer of $10,000 to the accountant can be considered as an economic cost.

Economics Concept Introduction

Economic cos t: An economic cost is a cost to a firm for utilizing economic resources in the production.

Accounting cost: An accounting cost is the actual expenses, plus depreciation charges for capital equipment.

Answer 7

Chapter 7, Problem 1RQ

To determine

Economic cost.

Answer 8

Expert Solution & Answer

Explanation of Solution

An explicit cost is a direct payment made to others in the production process which is also used to calculate the economic cost and accounting cost. In the given case, a payment of an annual retainer of $10,000 to the accountant is a direct payment. Therefore, it can be considered as an explicit cost. Therefore, it can be considered as both an economic cost and an accounting cost because since the monetary transaction exists in this payment it is called an accounting cost, whereas by paying the annual retainer of $10,000, the firm purchases the service of the accountant. Thus, it is also a cost of economic resources. Hence, the payment of an annual retainer of $10,000 to the accountant can be considered as an economic cost.