EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 9SP
To determine
Identify the problem that arises when calculating the profit.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job
and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-
of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and
$3,000 per year for equipment.
Please enter your answers as whole numbers with no decimal places (ie. 5000 or $5000 not 5000.00
or "Five thousand dollars"). If you want to enter a negative number use a negative sign "-" and do not
use parenthesis (ie. -2000 or -$2000 not (2000) or (-$2000)).
What is Pat's accounting profit?
What is Pat's economic profit?
Did Pat make the right decision by becoming a personal trainer? (Yes or No)
Janet spends $20,000 per
year on painting supplies and storage space. She
recently received two job offers from a famous
marketing firm- one offer were for $100,000 per
year, and the other was for $90,000. However, she
turned both jobs down to continue a painting
career. If Janet sells 25 paintings per year at a price
of $8,000 each: a. What are her accounting
profits? Show your steps leading to your answer b.
What are her economic profits
Use the accompanying graph to answer the following questions. Assume the company makes 30,000 parts per month of Product A and 17,500 parts per month of Product B.
Click the icon to view the provided graph.
(a) Which Product has the higher variable cost, and what is this value in units of dollars per part?
has the higher variable cost. This value is $/part. (Type an integer or a decimal. Round your answer to two decimal places.)
More Info
Total Cost or Revenue [$] Milions
$6-
$5-
$4-
$3-
FA
$0-
O.
0
10
- Product A Total Cost
- Product B Total Cost
Product A Revenue
Product B Revenue
G1
A
20
30
G
T
40
Time (t) [months]
Print
50
Done
60
N
...
70
80
Ⓡ
o
X
Chapter 8 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
Knowledge Booster
Similar questions
- You have been working as a manager of fashion store. During your work you have saved $50,000. You decided to use the money you saved to start your own business. You decided to use the money you saved to buy the materials. You also decided to utilize a store you own to home your business. The store you used for your business could have been rented for $8,000 a year. You hired a clerk to help you in the store that will cost $20,000 per year. The interest you could have earned on the $50,000 you used to buy the materials was $3,000 per year. Furthermore, you decided to manage your own business and you decided to quit your job that was paying $28,000 per year. You paid $8,000 for utility. What is your explicit cost? Assume that your total sale for the year was $160,000. What is your implicit cost, what is the accounting profit? What is your economic profit?arrow_forwardAs a manager which do you think should you consider accounting profits or economic profits? why?arrow_forwardMegan used to work at the local pizzeria for $17,000 per year but quit in order to start her own deli. Last year, she paid $4,000 rent each month, $4,500 for employee payroll each month, and $1,500 for supplies each month. She was planning on selling $2,500 worth of furniture but ended up bringing the furniture to her new deli. She had total revenue of $150,000. She asked an accountant and an economist to calculate her annual costs. Accountant says cost is $120,000, and economist says her cost is $139,500. Accountant says cost is $139,500, and economist says her cost is $120,000. Accountant says cost is $10,000, and economist says her cost is $29,500. Accountant says cost is $30,000, and economist says her cost is $10,500.arrow_forward
- A student once said she 'didn't believe in sunk costs. She meant that the idea that 'some costs are sunk and shouldn't be accounted for in making decisions' didn't make sense and that all costs associated with a project were important. Do you think the concept of sunk costs is important to business decision-making? Why or why not?arrow_forwardMarty used to be a bartender making $5,000 a year but he quit in order to become a clown that does shows at birthday parties. His clown car and costumes cost $7,000 and he did a lot of shows in the past year, making $13,000 in revenue but paying $2,000 in variable costs for balloons, gas, etc. Marty asked an accountant and an economist to calculate his profit. What did they report?arrow_forwardSuppose that you want to open a new business or purchase an existing one. Describe that business. What good or service would you provide? Where would you be located? What would be some explicit costs of starting the business? What would be some implicit costs?arrow_forward
- You are running a small business. At the beginning of the month you have $1000. At the end of the first week you have revenues of $2200 and expenses of $1000 for that week. In the second week your revenues are $2000 and your expenses are $700. In the third week your revenues are $2100 and your expenses are $1100. In the fourth week, your revenues are $2200 and your expenses are $3000 (they are higher as you need to pay the rent). You have a checking account earning 1% annually compounded weekly. a) How much money do you have at the end of the four weeks? b) What is the minimum balance of the account over those four weeks? Does it ever drop below $1000?arrow_forwardNo excel, show full work pleasearrow_forwardThe following table shows a company's total cost of production at various production quantities. Fill in the remaining cells of the table. (Note: If a value is a decimal, round to the nearest integer.) Average Fixed Cost Average Total Cost Fixed Variable Total Marginal Average Variable Quantity Cost Cost Cost Cost Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 150 150 1 150 60 210 2 150 105 255 3 150 135 285 4 150 150 300 150 180 330 6. 150 240 390 7 150 345 495 150 495 645 9. 150 675 825 On the following graph, plot the company's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer: For example, the average total cost of producing one pair of boots is $210, so you should start your…arrow_forward
- Josh and Alex work as design engineers creating high‑end lighting fixtures. After one particularly enlightened afternoon, they decide to follow their dreams and open a cupcake bakery. Please classify their various costs. Supplies like sugar, butter, and baking trays Advertising space taken out on a social networking site The salary Alex earned in his previous job designing light fixtures The garage spaced used for baking that can no longer be rented out to a college student The money they pay their neighbor's six-year old son to deliver cupcakes to their customers Implicit costs Not a cost Explicit costsarrow_forwardA firm had sales revenue of $942 million last year. It spent $463 million on labor, $88 million on capital and $162 million on materials. The firm's factory sits on land owned by the firm that could be rented out for $2 million per year. What was the firm's economic profit last year in millions of dollars? (Do not include the word "million" or the dollar symbol in your answer, just a number.)arrow_forwardA firm had sales revenue of $1 million last year. It spent $600000 on labor, $150000 on capital and$200000 on materials. What was the firm’s accounting profit?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning