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# MicroEcon chapter 7&8 1-3, 10-12. PLEASE EXPLAIN WHYY.  thanks Use the table below to answer the next...

MicroEcon chapter 7&8

1-3, 10-12.

Use the table below to answer the next 3 questions

 Units of Output Total Fixed Cost Total Variable Cost 1 \$1000 \$200 2 450 3 800 4 1350 5 1950

10. Given the cost schedule above, the ATC of producing 4 units is

(a)        \$550                                                    (c)        \$1000

(b)        \$588                                                    (d)       \$2350

11. Given the cost schedule above, the TC of producing 3 units of output is

(a)        \$800                                                    (c)        \$1800

(b)        \$1000                                                  (d)       \$2800

12. Given the cost schedule above, it can be seen that the MC of the 3rd unit produced is

(a)        \$350                                                    (c)        \$600

(b)        \$550                                                    (d)       \$800

1. The law of diminishing returns indicates that the greater use of a variable input, holding other factors fixed, results in:

(a)        A declining rate of increase in the total output for each additional unit of input.

(b)        A rising MC curve.

(c)        A declining MPP curve.

(d)       All of the above.

2. Economic cost is equal to
(a)        accounting cost minus implicit cost

(b)        accounting cost plus implicit cost

(c)        explicit cost minus fixed cost

(d)       variable cost plus explicit cost

3.   A firm has total revenues of \$100,000, and has total explicit costs of \$75,000. The owner took \$100,000 out of a savings account which yielded interest of \$10,000 per year to start the business. It is correct to say that

(a)        economic profits are zero

(b)        accounting profits are zero

(c)        economic profits are \$25,000.

(d)       accounting profits are \$25,000.

Units of output . Total fixed Cost . Total variable cost

1 . 1000. 200

2. 1000 . 450

3 . 1000 . 800

4 . 1000. 1350

5 . 1000. 1950

Answer- 10 correct option \$ 588

Total cost = TOtal variable cost + Total fixed cost

At 4th unit Total cost = 1350 + 1000 = 2350

ATC = TC/ 4 = 2350/4 = 587.5

Tc = TVC + TFC

= 800 + 1000

= \$1800

MC is change in TVC divided by change in output

Change in TVC at 3rd unit is 800-450

MC = 350/1

\$350

Answer- 1 .Correct option is 1 A declining rate of increase in the total output for each additional unit of input.

Because this is the condition of law of variable proportion.

Answer- 2 b ) accounting cost plus implicit cost

Because economic cost is submission of explicit and implicit cost. And accounting cost only takes explit cost not implicit which is opportunity cost which is only taken by economic cost.

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