ECN 361 Week 6 Discussions plus Quiz
(ECN 361 Week 6)
ECN 361 Week 6 Discussion Question 1, Participation, Responses
Suppose that a small family farm sold its output for $100,000 in a given year. The family spent $25,000 on fuel; $40,000 on seed, fertilizer, and pesticides; and $25,000 on equipment, including maintenance. The family members could have earned $20,000 working at other occupations. What is the family’s accounting cost? What is the family’s economic cost? Could the family’s economic cost ever exceed its accounting cost? Why?
ECN-361 Week 6 Discussion Question 2, Participation, Responses
News reports from the western United States occasionally report incidents of cattle ranchers slaughtering many newborn calves and burying them in mass graves rather than transporting them to markets. Assuming that this is rational behavior by profit-maximizing “firms,” explain what economic factors may influence such behavior.
ECN 361 Week 6 Quiz (Questions & Answers)
- Question: Scenario 13-3 Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home- organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. Refer to Scenario 13-3. Ziva’s accounting profit from farming equals
- Question: Scenario 13-3 Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home- organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. Refer to Scenario 13-3. Ziva’s accountant would calculate the total cost for the day of farming to equal
- Question: Table 13-10 Teacher’s Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. Refer to Table 13-10. One month, Teacher’s Helper produced 18 instructional modules. What was the average fixed cost for that month?
- Question: Which of the following explains why long-run average total cost at first decreases as output increases?
- Question: Table 13-3 Refer to Table 13-3. The marginal product of the second worker is
- Question: Figure 13-6 The following figure depicts average total cost functions for a firm that produces automobiles. Refer to Figure 13-6. Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?
- Question: Walter … to work as a high school teacher for $40,000 per year but quit in order to start his own painting business. To invest in his painting business, he withdrew $20,000 from his savings, which paid 3 percent interest, and … $30,000 from his uncle, whom he pays 3 percent interest per year. Last year Walter paid $25,000 for supplies and had revenue of $60,000. Walter asked Tyler the accountant and Greg the economist to calculate his painting business’s costs.
- Question: Consider a competitive market with a large number of identical firms. The firms in this market do not use any resources that are available only in limited quantities. In this market, an increase in demand will
- Question: Suppose that a firm’s long-run average total costs of producing televisions decreases as it produces between 10,000 and 20,000 televisions. For this range of output, the firm is experiencing
- Question: A firm’s opportunity costs of production are equal to its
