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jadechimpanzee427Lv1

28 Sep 2019

QUESTIONS

1. Explain the difference between operating decisions and planning decisions

2. Explain the following costs and observe the difference between each one.

1. Historical costs

2. Current costs

3. Replacement cost

4. Opportunity Cost

5. Explicit cost

6. Implicit cost

7. Incremental cost

8. Sunk cost

7. Short-run and long-run cost

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Romarie Khazandra MarijuanLv10

28 Sep 2019

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Related questions

1. At any given rate of output, the difference between total cost and fixed cost is:

A. Marginal cost.

B. Average variable cost.

C. Zero in the short run.

D. Variable cost.

2. Accounting costs and economic costs differ because

A. Economic costs include implicit costs and accounting costs do not.

B. Accounting costs include implicit costs and economic costs do not.

C. Economic costs include explicit costs and accounting costs do not.

D. Accounting costs include explicit costs and economic costs do not.

3. In the short run, which of the following is most likely a variable cost?

A. Contractual lease payments.

B. Labor and raw materials costs.

C. Property taxes.

D. Interest payments on borrowed funds.

ceruleanwoodchuck902

26. To the economist total cost includes

A. explicit and implicit costs.

B neither implicit nor explicit costs.

C. implicit, but not explicit, costs.

D. explicit, but not implicit, costs.

27. Accounting profits are typically

A. greater than economic profits because the former do not take explicit costs into account

B. equal to economic profits because accounting costs include all opportunity costs.

C. smaller than economic profits because the former do not take implicit costs into account.

D. greater than economic profits because the former do not take implicit costs into account.

28. Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits were

A. $100,000 and its economic profits were $0.

B. $200,000 and its economic profits were $0.

C. $100,000 and its economic profits were $100,000.

D. $0 and its economic loss was $200,000.

29. The basic difference between the short run and the long run is that

A. all costs are fixed in the short run, but all costs are variable in the long run.

B. the law of diminishing returns applies in the long run but not in the short run.

C. at least one resource is fixed in the short run, while all resources are variable in the long run.

D. economies of scale may be present in the short run but not in the long run.

30. The law of diminishing returns indicates that

A. as extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point.

B. because of economies and diseconomies of scale, a competitive firm's long-run average total cost curve will be U-shaped.

C. the demand for goods produced by purely competitive industries is downsloping.

D. beyond some point, the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction.

sapphirecrow883

3. Cost of Production 1

a. Explain the difference between explicit costs and implicit costs and who would care about these terms and why.

b. From the point of view of a firm, how would you explain the difference between the short run and long run, and their impact on the decision-making of the firm?

i. How do you tell short run from long run and how will those distinctions impact the decision-making of the firm?

c. Your boss asks you to document your companiesâ production function. How would you do that? What information would you need? Where would you get that info? Be specific.

i. What does the production function consist of?

ii. What does it tell us?

iii. How would you approach defining your company production function?

d. List and explain the Short Run Production Relationships