10.15 Chapter 13 - Econ 101 Introduction to Microeconomics...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Click to edit Master subtitle style Econ 101 Introduction to Microeconomics Professor Richard V. Burkhauser 13 The Costs of Production
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Econ 101 – Professor Burkhauser Key Concepts total revenue, p. 268 total cost, p. 268 profit, p. 268 explicit costs, p. 269 implicit costs, p. 269 economic profit, p. 270 accounting profit, p. 270 production function, p. 272 marginal product, p. 273 diminishing marginal product, p.273 fixed costs, p. 275 average total cost, p. 276 average fixed cost, p. 276 average variable cost, p. 276 marginal cost, p. 276 efficient scale, p. 278 economies of scale, p. 281 diseconomies of scale, p. 281 constant returns to scale, p. 281 increasing returns to scale, class decreasing returns to scale, class
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Econ 101 – Professor Burkhauser Figure 13.1 Economist versus Accountant Reven ue To tal opportuni ty co sts How an Economist Views a Firm How an Accountant Views a Firm Reven ue Econo mic pr ofit Impli cit co sts Expli cit co sts Expli cit co sts Accounti ng pr ofit
Background image of page 4
Econ 101 – Professor Burkhauser Question 13.1 Economic versus Accounting Costs Joe quits his $10,000 job as a pants presser and opens his own dry cleaning store. His financial report for the past year shows the following: Market value of the shop (beginning and end of the year) $50,000 Sales revenue of the shop $25,000 Operating expenses $5,000 If the market interest rate is 10%, an economist would say his profits were: a. $5,000 b. $10,000 c. $15,000 d. $20,000 e. $25,000
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Econ 101 – Professor Burkhauser Use this information to answer Question 13.2: Bill quits his $20,000 job as a cook and opens his own restaurant. His financial report for the past year shows the following: Market value of the shop $100,000 (beginning and end of the year) Sales revenue of the shop $ 40,000 Operating expenses $ 10,000
Background image of page 6
Econ 101 – Professor Burkhauser Question 13.2: Economic versus Accounting Costs If the market rate of interest is 10 percent, an economist would say his profits were: a) $ 0 b) $10,000 c) $20,000 d) $30,000 e) $40,000
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Econ 101 – Professor Burkhauser Question 13.3: Economic versus Accounting Costs Tony is a wheat farmer, but he also spends part of his day teaching guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 26

10.15 Chapter 13 - Econ 101 Introduction to Microeconomics...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online