Question

In: Economics

4. Working with Numbers and Graphs Q4 Suppose that explicit costs are $13,000 and implicit costs...

4. Working with Numbers and Graphs Q4

Suppose that explicit costs are $13,000 and implicit costs equal zero.

If economic profit is $14,000, then accounting profit is_________________.

5. Working with Numbers and Graphs Q5

If accounting profit is $106,000 greater than economic profit, it implies that(explicit or implicit costs)___________ equal

6. Working with Numbers and Graphs Q6

If marginal physical product is rising, what does marginal cost look like?

Marginal cost is rising.

Marginal cost first rises and then declines.

Marginal cost first declines and then rises.

Marginal cost is declining.

7. Working with Numbers and Graphs Q7

If the average total cost (ATC) curve is continually declining, what does this imply about the marginal cost (MC) curve?

The MC curve is continually declining.

The MC curve is below the ATC curve.

There are no implications because there is no relationship between the ATC curve and the MC curve.

The MC curve is above the ATC curve.

8. Working with Numbers and Graphs Q8

When total fixed costs are zero, total cost is (less,greater,equal?) total variable costs.
.

Solutions

Expert Solution

(4) Explicit cost = $13000

implicit cost=$0

Accounting profit = Revenue - Explicit cost

Economic profit = Revenue - explicit cost - implicit cost

=> Economic profit = Accounting profit - implicit cost

$14000 = Accounting profit - $0

Accounting profit = $14000 + $0

Accounting profit = $14000

(5)  

Accounting profit = Revenue - Explicit cost

Economic profit = Revenue - explicit cost - implicit cost

=> Economic profit = Accounting profit - implicit cost

=> Accounting profit = Economic profit + Implcit cost. ---------- (1)

Accounting profit is $106000 greater than economic profit

Accounting profit = $106000 + Economic profit ---------(2)

Put eq (2) in eq (1)

$106000 + Economic profit = Economic profit + Implicit cost

=> Implicit cost = $106000.

If accounting profit is $106,000 greater than economic profit, it implies that implicit costs equal $106000.

(6) If the marginal physical product is rising, then the marginal cost is declining.  

Answer: Option (D)

(7) If the average total cost (ATC) curve is continually declining, this implies the marginal cost (MC) curve is below the ATC curve.

Answer: Option (B)

(8) Total Cost = Total Variable cost + Total Fixed cost.

If the total fixed cost is zero, then the total cost is equal to total variable cost.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Explain the difference between explicit costs and implicit costs. - Explicit costs will involve outflow of...
Explain the difference between explicit costs and implicit costs. - Explicit costs will involve outflow of cash due to the use of factors of production is called Explicit Cost. This is also known as Out-of-pocket Costs. This is an actual occurrence to a business. There will be recording and reporting of these costs. The Accounting and Economic Profit will help with calculating of this.        EX: Salaries, rent, advertisement,wages, and so on.        -Implicit Costs is in which...
What are the differences between implicit and explicit costs? Why do economists include implicit costs when...
What are the differences between implicit and explicit costs? Why do economists include implicit costs when determining economic profits? Do accountants include them? How can the inclusion of implicit costs help businesses and individuals select options that yield the greatest net benefits? Using the concept of implicit costs, explain how they affect the economic costs of attending college? Or starting your own business?
Explain the difference between implicit and explicit costs. Give two examples of when an explicit cost...
Explain the difference between implicit and explicit costs. Give two examples of when an explicit cost is different from an implicit cost. In your own words, explain the difference between accounting and economic profit. Give two examples of when they differ. Finally, explain the difference between economies and diseconomies of scale. Provide examples of when an actual firm might benefit from economies of scale or be harmed by diseconomies of scale.
Explain the difference between implicit and explicit costs. Give two examples of when an explicit cost...
Explain the difference between implicit and explicit costs. Give two examples of when an explicit cost is different from an implicit cost. In your own words, explain the difference between accounting and economic profit. Give two examples of when they differ. Explain the difference between economies and diseconomies of scale. Provide examples of when an actual firm might benefit from economies of scale or be harmed by diseconomies of scale.
What are explicit and implicit costs, and how do they guide the behavior of the firm?...
What are explicit and implicit costs, and how do they guide the behavior of the firm? How does economic profit differ from accounting profit, and what role does it play? In your opinion should the firm base its decisions on accounting profit or upon economic profit?
Much of economics is focused on defining costs and distinguishing between implicit and explicit costs. Considering...
Much of economics is focused on defining costs and distinguishing between implicit and explicit costs. Considering this please respond to the following: Think of a company, and its industry, and give an example of an implicit cost for that company. With the implicit cost identified explain why, or why not, the cost needs to be considered. Are there any benefits to the cost identified? Are there any disadvantages? Explain. If necessary, complete additional research to support your ideas on this...
1. Compare both fixed and variable costs with examples. What are explicit and implicit costs why...
1. Compare both fixed and variable costs with examples. What are explicit and implicit costs why must you consider both t be efficient? 2. if you had the power and the authority to create a health care law for this country what would you do? 3. what do we mean by "Price elasticity of demand"? other than a price list and elasticity determinants that affect you own price elasticity of demand for an item. 4. Explain the "Law of diminishing...
a.Carefully explain what is meant by explicit; implicit; and sunk costs. How are they used to...
a.Carefully explain what is meant by explicit; implicit; and sunk costs. How are they used to calculate accounting profit and economic profit? [5 marks] b. Explain the relationship between total product, marginal product, and average product. [3 marks] c. Explain the difference between the short run and the long run. [4 marks] d. Why is the level of output at which marginal revenue equals marginal cost the profit maximizing output? [5 marks
1. Explain why economic costs include both explicit costs and implicit costs. 2. Explain the concept...
1. Explain why economic costs include both explicit costs and implicit costs. 2. Explain the concept of opportunity cost as related to the doctor in the Khan Academy video who gave up his profession to open a business. 3. What other factors do you think the doctor may have considered when he decided to leave his profession to open a business?
1. Describe the impact of explicit and implicit costs in calculating accounting profit and economic profit....
1. Describe the impact of explicit and implicit costs in calculating accounting profit and economic profit. 2. Assume you are a business manager for a firm that does a few million dollars worth of business each year. Select the profit measure (accounting profit or economic profit) you believe provides the most helpful information in making business decisions, and explain why? Note: once again, no hedging your bet here by selecting both measures or combinations of both measures. :-) Select one...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT