A producer borrows money and starts a business. He himself looks after the business. Identify implicit and explicit costs from this information. Explain.
Q: If there are implicit costs of production
A: To find : What is implicit cost of production.
Q: Explain Implicit and Explicit cost with the help of suitable example?
A: Firms undertake production by employing many resources. There are hiring costs of inputs like labor…
Q: The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential…
A: The economic cost is the sum of all losses of any goods that have a monetary value attached to them…
Q: Construct the cost schedule
A: Cost schedule refers to the table that shows the total cost of production at different levels of…
Q: Distinguish between implicit and explicit costs. How is it possible to have positive accounting…
A: Any cost that has already occurred but is not shown or reported as a distinct item is referred to as…
Q: Which of the following is a variable cost? a. Raw materials costs b. Interest payments c.…
A: Variable cost can be defined as the cost which depends on the level of output.
Q: Ontario is removing vehicle license renewal fees (article below). How does this affect the cost of…
A: Understanding the impact of eliminating licence renewal fees on automobile ownership costs is the…
Q: A farmer takes a farm on rent and carries on farming with the help of family members. Identify…
A: # The costs which can't me measured for the accounting purpose is called implicit costs and on the…
Q: The opportunity cost of money that a firm’s owner has invested is an example of A Implicit costs. B…
A: Opportunity cost is by implicit costs. That is, implicit cost is the opportunity cost that arises…
Q: Jim cannot work for a week due to illness. [ Select | [ Select ] explicit cost implicit cost Norman…
A: "Since you have asked multiple parts, we will answer only first three parts for you. If you have any…
Q: Lewis contracted with the government to dredge 2 million cubic yards of silt from a ship channel.…
A: Excavate: It refers to dig a hole in the ground.
Q: What is the difference between economic costs and accounting costs? Explain it in your own words and…
A: Meaning of Cost: The term cost refers to the situation under which a firm occurs various expenses…
Q: Which of the following is an example of an implicit cost? depreciation of assets lease payments Rent…
A: When a firm operates in the market, it incurs explicit and implicit cost.
Q: True or false The Law of Diminishing returns implies that the marginal cost of production (MC) is…
A: Answer: Law of diminishing returns: According to the Law of diminishing returns if an input of…
Q: demonstrate and explain how costs concepts help in managing production between the shortrun and…
A: When businesses change output levels over time in response to anticipated economic gains or losses,…
Q: Explain the difference between explicit and implicit costs, and giveexamples of each.
A: Cost refers to the expenses that firms have to incur in the production of their goods and services.…
Q: Which of the following is an example of a Variable Cost? A. an employee who makes $40,000 a year B.…
A: Fixed cost is the cost that remain same at all levels of output. Variable cost is the cost the…
Q: Distinguish between explicit and implicit costs, giving examples of each. Why does the economist…
A: Externalities: It occurs in the economy when the production of goods and services and the…
Q: A graph represented by a straight line parallel to the output of the X-AXIS is an image of which…
A: The total cost is the sum of total fixed cost and total variable cost of production. The total fixed…
Q: Explain the term Total costs?
A: Any firm main objective is to maximize its profit and for maximizing profits every firm must know…
Q: Explain what a sunk cost is, what an opportunity cost is, and how each cost should be handled when…
A: Sunk cost refers to the cost or the expense that is already made and can be no longer recovered.…
Q: Identify yes or no as to whether or not each of these costs would be relevant for the decision on…
A: Business have two types of cost. fixed and variable fixed cost cannot be shifted and have to be…
Q: Which of the following is likely to be the least important factor for firms in determining…
A: Production is an activity that employs labor, capital, products, and services as inputs to generate…
Q: Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per…
A: Opportunity cost is the cost that a person faces due to his decision of giving up one good for…
Q: Distinguish between explicit and implicit costs, giving examples of each. What are some explicit and…
A: Cost is the expenditure incurred by firms on the production of goods and services.
Q: The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential…
A: Explicit costs are those costs that a firm openly acknowledges. To name a few, there are costs…
Q: Identify the explicit costs incurred by this business. Why are they explicit costs?
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: What cost would an accounting statement reveal should current decisions be based on accounting cost.
A: Accounting statement should reveal the cost of production,cost of capital.
Q: example a(n): A. sunk cost B. out-of-pocket cost C. opportunity cost D. incremental cost
A: Marginal cost is the cost that the manufacturer spends to manufacture one more unit of the good. The…
Q: The change in fotal costjof production as the output or total product of the business is expanded…
A: Marginal cost: It is the extra cost of producing an extra unit product.
Q: marginal factor cost is the extra cost of producing one more unit of output. True False
A: The marginal factor cost is the extra cost of engaging extra unit of input or factor.
Q: Which of the following is an example of an implicit cost? A) the cost of fuel and materials. B) the…
A: Implicit cost is also called opportunity cost. It is the cost that is incurred but not reported…
Q: Opportunity cost refers to A) explicit costs+ implicit costs B) Time costs C) Money costs D) None of…
A: The total amount of money used in producing goods & services and including labor, time and…
Q: when marginal cost is less than average total cost is falling true False
A: Answer (21). True, Explanation: When the marginal cost is less than the average total cost, the…
Q: At the profit maximizing level of input use, Which of the following are true? (i) MVP=0 (ii) MVP=MIC…
A: MVP (Marginal value product) is the additional revenue generated from hiring or employing an extra…
Q: Which of the following is a typical example of a variable cost of production in a business firm? A.…
A: Variable Cost is that cost which keeps on changing with the change in the level of output.
Q: A cost that changes with the level of production is called a(n)____cost a.variable b.average total…
A: Ans. The cost is the expenditures that are incurred during the production of the goods and services.…
Q: True or False The average total cost cannot equal marginal cost.
A: Average total cost It refers to the total cost per unit of production. ATC = TC/Q where ATC is…
Q: The cost that cannot be recovered if a firm goes out of business is known as __________. a. Cost of…
A: If a firm goes out of business then some of the costs can not be recovered such as Advertising…
Q: Nokia sells a new budget cell phone. Based on information provided by the accounting department, the…
A: Total cost is sum of fixed cost and variable cost. Fixed cost does not depend on quantity whereas…
Q: What are different types of costs involved in production of goods and services? Analyze the…
A: Fixed expenses, variable costs, and the total cost of production make up the cost of production. The…
Q: Opportunity cost refers to A) explicit costs+ implicit costs
A: The total amount of money used in producing goods & services and including labor, time and…
Q: The long run is defined as A) the period of time when all resources are variable. B) any time after…
A: The long run is defined as the period of time when all resources are variable. Firm can change all…
Q: an interest payment on a loan to a firm is an explicit or implicit cost?
A: The implicit cost is an indirect cost defined as the opportunity cost of utilizing a firm's…
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- b. List and explain which of the following is a fixed cost or a variable cost forCaribbean Airlines. i. The cost of fuel used in its planes.ii. The rent on its Piarco headquarters.iii. The lease payments on its current inventory of jets.iv. The cost of peanuts it serves to passengers.v. The salary paid to the Chief Executive Officer.A computer company produces affordable, easy-touse home computer systems and has fixed costs of $250. The marginal cost of producing computers is $700 for the first computer, $250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the sixth, and $500 for the seventh. a. Create a table that shows the company’s output, total cost, marginal cost, average cost, variable cost, and average variable cost. b. At what price is the zero-profit point? At what price is the shutdown point? c. If the company sells the computers for $500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVC curves to illustrate your answer and show the profit or loss. d. If the firm sells the computers for $300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVC curves to illustrate your answer and show the profit or loss.The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $30. Fill in Table 7.16 for total cost, average variable cost, average total cost, and marginal cost., now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of $25 each. a. What will be the company’s profits or losses? b. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? c. At the given quantity and price, is the marginal unit produced adding to profits?
- List and explain which of the following is a fixed cost or a variable cost forCaribbean Airlines. i. The cost of fuel used in its planes.ii. The rent on its Piarco headquarters.iii. The lease payments on its current inventory of jets.Ball Bearings, Inc., faces costs of production as follows:a. Calculate the company’s average fixed cost, average variable cost, average total cost,and marginal cost at each level of production.b. The price of a case of ball bearings is $50. Seeing that he can’t make a profit, thechief executive officer (CEO) decides to shut down operations. What is the firm’sprofit/loss? Was this a wise decision? Explain.c. Vaguely remembering his introductory economics course, the chief financial officertells the CEO it is better to produce 1 case of ball bearings, because marginal revenueequals marginal cost at that quantity. What is the firm’s profit/loss at that level ofproduction? Was this the best decision? ExplainBall Bearings Inc. faces costs of production as follows:Quantity Total Fixed cost Total Variable Cost0 200 01 200 502 200 703 200 904 200 1405 200 2006 200 360a. Calculate the company’s average fixed costs, average variable costs, average total costs, andmarginal costs. a. The price of a case of ball bearings is $50. Seeing that she can’t make a profit, the chiefexecutive officer (CEO) decides to shut down operations. What are the firm’s profits/losses?Was this a wise decision? Explain. b. Vaguely remembering his introductory economics course, the chief financial officer tells the CEOit is better to produce one case of ball bearings because marginal revenue equals marginal costat that quantity. What are the firm’s profits/losses at that level of production? Was this the bestdecision? Explain.
- Fertilizer Q TFC TVC TC MC ATC AVC AFC TR MR 25 70 1300 100 8 150 10 55 220 3500 Notes: Fertilizer, Q, TFC, TVC, TC, MC, ATC, AVC and AFC refer to quantity of fertilizer (in units), quantity of output (in units), total fixed cost, total variable cost, total cost, marginal cost, average total cost, average variable cost and average fixed cost, respectively. Answer the following questions based on the Table completed: What is the marginal input cost? Answer Is the firm making a profit or loss? Is the firm operating in the long-run or in the short-run? Why?i. Calculate the marginal cost, marginal revenue and profit for each unitof production. ii. How many units should the firm produce to maximise profit?Which of the following is the extra, or additional, cost of producing one more unit of output? Select one: a. Marginal cost Ob. Average fixed cost Oc. Total variable cost Od. Average variable cost
- “A firm that earns only normal profit is not covering all its costs.” Do you agree or disagree?A computer company produces affordable, easy-to-use home computer systems and has fixed costs of $250. The marginal cost of producing computers is $700 for the first computer, $250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the sixth, and $500 for the seventh. Create a table that shows the company’s output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for $500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVC curves to illustrateBob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's economic and accounting profits in the short run ? A. Economic profits are minus $10 and accounting profits are $20 B.Economic profits are $20 and accounting profits are minus $10 C. None Which one?