Ch13 Review Qs

Ch13 Review Qs - Federico Nusymowicz Ch.13 Review Questions 2 Give an example of an opportunity cost that an accountant might not count as a cost

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Federico Nusymowicz Ch.13 Review Questions 2. Give an example of an opportunity cost that an accountant might not count as a cost. Why would the accountant ignore this cost? If a retail entrepreneur had a degree in law, and could be earning $300 an hour working as an attorney, but instead chose to dedicate his time to his business, this would indicate an opportunity cost of $300/hour. An accountant working for this lawyer-turned-businessman, however, wouldn’t count this as a cost, since no physical money is flowing out of the business; it is, in essence, an implicit rather than an explicit cost. 4. Draw a production function that exhibits diminishing marginal product of labor. Draw the associated total-cost curve. (In both cases, be sure to label the axes.) Explain the shapes of the two curves you have drawn. Production function 0 20 40 60 80 100 120 140 160 180 200 0 2 4 6 8 10 Number of Workers Hired Total-cost curve 0 20 40 60 80 100 120 0 50 100 150 200 Quantity of Output
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This note was uploaded on 06/26/2008 for the course ECON S-10ab taught by Professor Medoff during the Summer '07 term at Harvard.

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Ch13 Review Qs - Federico Nusymowicz Ch.13 Review Questions 2 Give an example of an opportunity cost that an accountant might not count as a cost

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