L. | D) | M. | Ans: | D | Exhibit 7 | | 8. | (Exhibit 7: Total Revenue‚ Total Costs‚ and Economic Profit) Total revenue and total cost are equal at approximately _______ pounds and $_______ . | A) | 2‚000; 1‚400 | B) | 5‚000; 1‚600 | C) | 10‚000; 2‚800 | D) | 15‚000‚2‚800 | Ans: | C | | | 9. | (Exhibit 7: Total Revenue‚ Total Costs‚ and Economic Profit) Total revenue and total cost are equal at
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BUS640: Managerial Economics Professor John Sellers Problem 1: a Which inputs are fixed and which are variable in the production function of William’s pizza shop? Over what ranges do there appear to be increasing‚ constant‚ and/or diminishing returns to the number of workers employed? Fixed: Oven costs; building costs; normal utility costs. Variable: # of workers; raw material costs; electricity costs; per unit costs. b What number of workers appears to be most efficient in terms
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equal to the market price‚ so the marginal revenue curve is a horizontal line at the market price of $5 per box. Since the demand curve is also a horizontal line at the market price‚ the demand curve and the marginal revenue curve are the same. Economic profit equals total revenue minus total cost‚ so profit is at its maximum when the difference
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CURVE: A curve that graphically represents the relation between total production by a firm in the short run and the quantity of a variable input added to a fixed input. When constructing this curve‚ it is assumed that total product changes from changes in the quantity of a variable input (like labor)‚ while other inputs (like capital) are fixed. This is one of three key product curves used in the analysis of short-run production. The other two are marginal product curve and average product curve.
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run decision. Whether or not to build a new factory would be considered a long run decision. 1. Total fixed Coast The total fixed cost curve graphically represents the relation between total fixed costs incurred by a firm in the short-run production of a good or service and the quantity produced. Because total fixed cost is fixed‚ the total fixed cost curve is a horizontal line. e.g. Company may work on rent that rent per month will remain fixed; other example is salary insurance. These
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Question 1: (a) Suppose the income elasticity of demand for pre-recorded music compact disks is +5 and the income elasticity of demand for a cabinet maker’s work is +0.5. Compare the impact on pre-recorded music compact disks and the cabinet maker’s work of a recession that reduces consumer incomes by 10 per cent. (2 marks) (b) How might you determine whether the pre-recorded music compact discs and MP3 music players are in competition with each other? (2 marks) (c) Interpret the
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21 : Theory of Cost 1 Recap from last Session Production cost Types of Cost: Accounting/Economic Analysis Cost –Output Relationship Short run cost Analysis Prof. Trupti Mishra‚ School of Management‚ IIT Bombay Session Outline The Long-Run Cost-Output Relations Break-Even Analysis: Linear Cost and Revenue Functions. Break-Even Analysis: Non-Linear Cost and Revenue Function Prof. Trupti Mishra‚ School of Management‚ IIT Bombay long-run is a period for which all inputs
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profit e. Answer A‚ answer B‚ and answer D are correct. 4. A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment‚ is referred to as ____ cost. a. a minimized b. a maximized c. an explicit d. an implicit e. an invisible 5. An implicit cost is a. when a money payment is made only because a factor of production is used. b. when a factor of production is used but a money payment is not made. c. when a money payment is made. d. not
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Protectionist - Definition Protectionism is the economic policy of promoting favored domestic industries through the use of high tariffs and other regulations to discourage imports. Historical variants of this policy have included mercantilism‚ a trade policy aimed at maximizing currency reserves by running large trade surpluses; and import substitution‚ a trade policy in which targeted imports are replaced by local manufactures in order to stimulate local production. Recent examples of protectionism are
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not revenue from a product or service has the ability to cover the relevant costs of production of that product or service. Managers can use this information in making a wide range of business decisions‚ including setting prices‚ preparing competitive bids‚ and applying for loans. BACKGROUND The break-even point has its origins in the economic concept of the "point of indifference." From an economic perspective‚ this point indicates the quantity of some good at which the decision maker
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