Log in
HomeTextbook Notes300,000US110,000

ECON 2030 Chapter : Marginal Cost

6 views2 pages
azuremammoth471
15 Mar 2019
School
LSU
Department
Economics
Course
ECON 2030
Professor
All

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

Sunk cost: costs that have already been incurred and cannot be recovered. Marginal cost: additional costs and above the costs you"ve already incurred and. Marginal benefit: additional benefit above when you"ve already determined. Opportunity cost: benefit from the next best alternative. Opportunity cost of having a kid= 2 boats, 3 cars, 2 weeks vacation (what you could"ve had if you didn"t have a kid) Market forces: economic force with free reign to work through the market: change in prices. Economic reality is controlled by 3 forces: economic forces (invisible hand) [price changes, social and cultural forces, political and legal forces. Pricing policies of firms, household decisions on what to buy and how the. Problems of inflation, unemployment, business cycles, and growth. How household consumption is related to income, how government policies. Microeconomics: study of individual choice and how it is influenced by economic forces markets allocate resources. Macroeconomics: the study of the economy as a whole affect growth.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Questions

Botco, inc. is constructing remote-controlled cars to sell to hobbyists. after doing some analysis, Botco's chief economist reported that, at the current level of output per month, the marginal benefit for making remote-controlled cars exceeds the marginal cost of making them.

Furthermore, the economist stated: "In future months, if Botco continues to increase its output per month, the marginal benefit of each additional car will continue to fall, while the marginal cost of each additional car will continue to rise." (You can assume that this effect will persist indefinitely.)

1. Given the above information, Is Botco making the optimum number of cars per month (the number that will yield the greatest total benefit/profit)? YES or NO

2. Should they make more or fewer cars per month?

3. How will they decide when they are making too many per month?

4. If it were possible, what would be the perfect (optimal) amount? Briefly Explain.

Thank you!


Can you solve them and tell me if youre sure 100% 100% 100%



Question 1 (1 point)

If two variables move together but are otherwise unrelated, we have

Question 1 options:

a fallacy of composition.

an econometric model.

a spurious correlation.

an efficiency problem.

evidence of a weak correlation but strong causation.

Save

Question 2 (1 point)

The Latin expression "ceteris paribus": is essential in ______.

Question 2 options:

collecting data.

identifying sunk costs.

evaluating theories.

recognizing scarcity.

developing spurious relationships.

Save

Question 3 (1 point)

Opportunity cost is best defined as

Question 3 options:

marginal cost minus marginal benefit.

the time spent on an economic activity.

the value of the best forgone alternative.

the monetary cost of an economic decision.

marginal cost plus marginal benefit.

Save

Question 4 (1 point)

A cost that cannot be recovered at the time a decision is being made is termed a(n)

Question 4 options:

marginal cost.

scarcity cost.

sunk cost.

average cost.

opportunity cost.

Save

Question 5 (1 point)

If the marginal costs of 1, 2, and 3 hours of talking on the phone are $50, $75, and $105, then the total costs are

Question 5 options:

$50, $150, and $315.

$50, $41.67, and $115.

$50, 125, and $230.

$50, $175, and $405.

impossible to calculate with information given.

Save

Question 6 (1 point)

In general, individuals should specialize in producing those goods for which they

Question 6 options:

can produce more quickly than others.

can produce less quickly than others.

have the lowest opportunity cost compared to others.

have the highest opportunity cost compared to others.

have an average opportunity cost.

Save

Question 7 (1 point)

The extra benefit that comes from an extra unit of activity is called the _________ of the activity.

Question 7 options:

benefit

marginal benefit

marginal cost

average benefit

reservation benefit

Save

Question 8 (1 point)

The marginal benefit of an activity is the

Question 8 options:

same as the total benefits of the activity.

total benefit divided by the level of the activity.

change in the activity divided by the change in benefits.

extra benefit associated with an extra unit of the activity.

total benefit divided by the change in the level of the activity.

Save

Question 9 (1 point)

The fundamental problem that is studied in economics is that

Question 9 options:

consumers have limited wants in the face of unlimited resources.

markets should function without government interference.

Canada is too wealthy.

consumers have unlimited wants in the face of limited resources.

there are unlimited resources.

Save

Question 10 (1 point)

The range of topics, or issues, that fit within the definition of economics is

Question 10 options:

limited to market activities, e.g., buying soap.

limited to individuals and firms.

extremely wide, requiring only the ideas of choice and scarcity.

limited to governments and nations.

very limited.

Save

Question 11 (1 point)

When economists make predictions using the framework of a given economic model, it is usually based on

Question 11 options:

personal experiences.

important relationships between particular variables.

mathematical abstractions.

political implications.

the profit-maximizing objective.

Save

Question 12 (1 point)

The cost of spending an evening partying instead of studying economics is

Question 12 options:

the resulting decrease in the test score in Economics.

the time spent at the party.

the score of the test.

the cost of the textbook.

university tuition.

Save

Question 13 (1 point)

As one progresses from a one-person economy to a large, multi-person economy, the shape of production possibilities curve changes from

Question 13 options:

downward sloping to upwards sloping.

linear to convex (bowed into the origin).

concave (bowed out from the origin) to linear.

convex (bowed into the origin) to concave (bowed out from the origin).

linear to concave (bowed out from the origin).

Save

Question 14 (1 point)

Which is NOT a sunk cost?

Question 14 options:

Monthly rent of $1,000 contractually specified in a one-year lease.

An insurance premium of $50 per year, paid last month.

An attorney's retainer of $50,000 per year.

A worker's wage of $15 per hour.

A non-refundable deposit for a tender.

Save

Question 15 (1 point)

"We should support government intervention because the market produces undesirable outcomes" is an example of

Question 15 options:

positive economics.

normative economics.

comparative economics.

negative economics.

formative economics.

Save


1  John raises bees to pollinate his orchard, a couple of bees which escaped ended up pollinating his neighbour's orchard so:

a. john's neighbour has received an external cost of john's beekeeping.

b. john's neighbour has received an external benefit of john's beekeeping.

c.john's neighbour has received an internal cost of john's beekeeping.

d.none of the above.

2. external costs are:

a. borne by individuals other than those who incurred them.

b.borned by the public but incurred by the government.

c.another term for implicit costs.

d.borne by the government but incurred by the public.

3. the optimal quantity of ail pollution is:

a. found by setting the quantity of air pollution equal to the quantity of water pollution.

b.a meaningless concept since monetary values cannot be attached to problems associated with pollution.

c.whatever amount of pollution is produced by the profit-maximizing firm.

d. found by equating the marginal benefits from further reductions in pollution and the marginal costs of further reductions in pollution.

4. technological changes that make it easier to produce in a "cleaner" fashion would cause:

a. the marginal cost curve of pollution abatement to shift left increasing the degree of air quality.

b.the marginal benefit curve of pollution abatement to shift left increasing the degree of air quality.

c.the marginal cost curve of pollution abatement to shift right increasing the degree of air quality.

d.the marginal benefit curve of pollution to shit right increasing the degree of air quality.

5. if pollution is bad, why do we still use pollution-causing resources such as coal and oil to generate electricity?

a. the transaction cost of pollution is too low.

b.governements lack the political will to enforce the use of pollution-free resources.

c.pollution is only a private cost.

d.the cost of using pollution-free resources to generate power in many circumstances is much higher than generating the same power through conventional pollution causing means.