micro 8 - Nate Neroni HW CH 8 microeconomics 1 Explicit...

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Nate Neroni HW CH 8 microeconomics 1. Explicit costs flow to resources owned and supplied by others. Implicit costs are payments for the use of self-owned and self employed resources. An explicit cost would be paying for room and board. An implicit cost would be providing yourself with pens and pencils or school supplies. Normal profit is cost because if you do not realize your normal or minimum payment for your effort you could shift to a different more attractive line of business. No it is not a cost of production. 2. accounting profit would be 37,000. Economic profit would be 2000. 3. A) long run B) short run C)long run D) short run 4. Inputs of labor Total product Marginal product Avg. product 0 0 0 0 1 15 15 15 2 34 17 17 3 51 17 17 4 65 14 16.25 5 74 9 14.8 6 80 6 13.333 7 83 3 11.86 8 82 -1 10.25 Marginal profit first rises and then declines until it is negative because of diminishing returns. This law assumes that technology is fixed and thus the techniques of production do not change.
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