BA 372 Lesson 6 Assignment 2

BA 372 Lesson 6 Assignment 2 - Leaving your family and...

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Ashley B. Hilliard 258-10-0169 July 5, 2010-October 22, 2010 BA 372 Lesson#6, Assignment 2 1. Give an example of an opportunity cost that an accountant might not count as a cost. Why would the accountant ignore this cost? An accountant would not count the owner’s opportunity cost of alternative employment as an accounting cost. The accountant ignores this opportunity cost because money does not flow into or out of the firm. 2. Suppose that your college charges you separately for tuition and for room and board. A. What is a cost of attending college that is not an opportunity cost? Instead of going to college you could be working so by going to college you are forgoing potential income. B. What is an explicit opportunity cost of attending college? Costs like tuition, books, school supplies. C. What is an implicit opportunity cost of attending college?
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Unformatted text preview: Leaving your family and friends behind to go off to college. 3. You are thinking about setting up a lemonade stand. The stand itself costs $200. The ingredients for each cup of lemonade cost $0.50. A. What is your fixed cost of doing business? What is your variable cost per cup? The fixed cost of doing business is $200; the variable cost per cup is $0.50. B. Construct a table showing your total cost, average total cost, and marginal cost for output levels varying from 0 to 10 gallons. (Hint: There are 16 cups in a gallon.) Gallons Total Cost Average Total Cost Marginal Cost 200 infinity-1 208 208 8 2 216 108 8 3 224 74.6 8 4 232 58 8 5 240 48 8 6 248 41.333 8 7 256 36.5 8 8 264 33 8 9 272 30.222 8 10 280 28 8...
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BA 372 Lesson 6 Assignment 2 - Leaving your family and...

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