Question

In: Economics

1)If fixed costs =100, variable costs = 50, and quantity equals 20, then what would the...

1)If fixed costs =100, variable costs = 50, and quantity equals 20, then what would the average variable cost equal?

2,3)Given the above information, what would the average total and average fixed cost be?

4)fixed costs? A)vary in the short run, B)vary with output level, C) do not vary with output level d) are the same as variable costs

5)We compute the marginal product of labor using which of the following formulas:

Group of answer choices

change in total output divided by change in labor hours

total output divided by total labor hours

6)A production function?

describes how inputs are combined to produce output.

describes how outputs are combined to make an input

has a constant slope

has a negative slope

7)We compute the marginal product of labor using which of the following formulas:

A)change in total output divided by change in labor hours

B)total output divided by total labor hours

C)change in total utility divided by change in labor hours

D)total output times total labor hours

8)A firm had sales revenue of $1 million last year. It spent $600,000 on labor, $150,000 on capital and $150,000 on materials. What was the firm’s accounting profit?

9)Which of the following is an implicit cost for a firm?

foregone interest

labor costs

rent payments

research and development spending

Solutions

Expert Solution

1.Ans: The average variable cost equal to 2.5

Explanation:

Average variable cost = Total Variable cost / Quantity = 50 / 20 = 2.5

2,3.Ans: the average total cost = 7.5  and average fixed cost = 5

Expalanation:

Total cost = Total fixed cost + Total variable cost = 100 + 50 = 150

Average total cost = Total cost / Q = 150 / 20 = 7.5

Avearge fixed cost = Fixed cost / Q = 100 / 20 = 5

4.Ans: C) do not vary with output level

Explanation:

Fixed cost are even available in the zero level of production and remain constant in the subsequent level of production.

5.Ans: change in total output divided by change in labor hours

Expalanation:

Marginal product of labor = Change in total output / Change in labor hours

6.Ans: describes how inputs are combined to produce output.

7.Ans: A) change in total output divided by change in labor hours

8.Ans: The firm’s accounting profit was 100,000

Explanation:

Accounting profit = Total revenue - Total explicit cost

= 1,000,000 - ( 600,000 + 150,000 + 150,000)

= 1,000,000 - 900,000

= 100,000

9.Ans: foregone interest

Explanation:

Explicit cost is also known as opportunity cost which is forgone or sacrificed.

Rahul Sunny answered 2 years ago
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