In economics, the cost of production is defined as the expenditures incurred to obtain the factors of production such as labor, land, and capital that are needed in the production process of a product. Explain the following in relation the total cost in economics. A firm pays its accountant an annual allowance of $10,000. Is this an economic cost?  The owner of a small retail store does her own accounting work. How would you measure the opportunity cost of her work?

Q: Draw the production function graph illustration the three stages (diminishing returns) in the…

A: Incrementing returns, falling returns and negative returns are the three stages of production. The…

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: Explain why the fixed cost has no influence at all on marginal cost.

A: In the short run, a firm will have two types of cost: fixed cost and variable cost. Total variable…

Q: An individual is both the owner and the manager of a shop taken on rent. Identify implicit cost and…

A: Explicit cost:- Standard business costs that appear in the accounting records and have a direct…

Q: What is a average total cost? : What is a Marginal cost?

A: The average total cost is the total cost per unit of output. It is calculated by dividing the total…

Q: Consider the following two systems of production, which produce the same quantity.   A (assemble…

A: Given information Assemble by hand system A: 35 workers and 1 robot Assemble by robot system A: 5…

Q: Explain how input, output and cost are interrelated

A: A business needs to make use of inputs for turning them into outputs that could finally be sold in…

Q: Using the definition QxAC = TC where Q = output, TC = the total cost of production and AC = the…

A: The average cost of production is calculated by dividing the total cost (TC) by the total output…

Q: Superconductor technology is becoming a widespread and indispensible component of the machines we…

A: Given,  Superconductors play a vital role in the manufacturing of machines. They are found in each…

Q: how can i calculate net cost if i have an equation for marginal cost and marginal benefit?

A: Net Cost (NC) is generally used to do cost-benefit analysis. Hence, it is a measure to determine the…

Q: Three managers of APISYONADO Company are discussing a possible increase in production who do you…

A: MR.NADO is correct as according to him  the extra revenues from selling the additional perfume…

Q: Explain why using opportunity cost as a measure of the “cost” of something is better than using a…

A: Trade-off:The term trade-off refers to sacrificing one commodity in order to buy the other…

Q: 35) What is the firm’s efficient scale?  A. the quantity of output that minimizes average total…

A: (35)  A firm's efficient scale implies the production of output such that it minimizes the average…

Q: Illustrate the link between the cost-minimization problem and total cost curve. What would happen to…

A: Cost minimization is a fundamental rule utilized by makers to figure out what blend of work and…

Q: Give an example of an opportunity cost that an accountant would not count as a cost. Why would the…

A: Opportunity cost, in economics, is related to the concept of scarcity and represents the potential…

Q: Which of the following is a cause of diminishing marginal productivity? a.In the long run, labor…

A: Marginal Productivity  Marginal productivity or marginal product is the additional output, return,…

Q: What explains the shape of the average and marginal cost curves?  Is it linked to any production…

A: Marginal cost is the measurement of change in total cost with the increment of quantity produced by…

Q: Sarah Sandoval is a coffee farmer trying to decide how many tons of coffee to produce. She can sell…

A: In a perfectly competitive market, there exists a large number of buyers and sellers of the good in…

Q: Imagine that you are considering starting your own business. Please share what you think would be…

A: The potential advantages that an individual, investor, or organization foregoes by choosing one…

Q: Marilyn opens an insurance brokerage. Which of the following is an example of her implicit cost?…

A: Opportunity cost: - opportunity cost is a forgone benefit that we could have earned by applying all…

Q: What is sunk cost? Provide an example of a sunk cost. Why are such costs irrelevant in making…

A: Costs refer to the expenses which are made by the firms in the production of goods, and services.…

Q: Draw the iso-cost line associated with an hourly budget of $1,000. b. What is the least-cost level…

A: Isocost curves are those curves that represent those combinations of inputs that can produce a given…

Q: The production function is the relationship between the maximum amount of output that can be…

A: A production function represents how firm transforms inputs into outputs.

Q: If we have information about workers’ marginal products, then total and average product can be found…

A: Summing the marginal values will give total product.

Q: State two examples of the fixed cost and two examples of the variable cost in economics

A: According to the given question Fixed cost are those cost in economics which are basically and…

Q: When it comes to the question on how long the short run is (in the context of production and cost),…

A: Factors of production: - The inputs that are used to produce goods and services are known as the…

Q: C(x) = 0.01x-0.3x + 10x gives the cost, in thousands of dollars, to produce x thousand items. (a)…

A: We are going to find the Marginal Cost and Minimum marginal Cost and output required to answer this…

Q: What is economies of scale? What are differences between internal and external economies of scale?

A: Economies of Scale: When a company expands its production then usually the cost per unit falls.…

Q: Complete the third column of the following table by calculating the marginal cost per dozen pizzas…

A: Marginal Cost using Total Cost= Change in Total Cost/Change in Quantity Marginal Cost using Variable…

Q: The concept of opportunity cost is that the economic cost of using a factor of production is the…

A: An opportunity cost shows the possible gains that a person, buyer, or organization lacks by…

Q: We know there is a link between productivity and costs. For example, recall the link between the…

A: In an economist's terms, when we talk about productivity, then we are talking about the marginal…

Q: QUESTION 2 Match each of the following terms and descriptions Explicit Cost A. the opportunity cost…

A: There are two type of cost- implicit cost and explicit cost. Explicit cost includes payment of money…

Q: Consider the table below that describes the costs associated with producing a good (Q). Q Total…

A: Average total cost is the total cost divided by units of output.

Q: What is the law of diminishing marginal product, In which stages of production it manifest and What…

A: According to the rule of decreasing marginal returns, any manufacturing process will reach a point…

Q: During the WW2, Germany's factories were decimated. It also suffered many human casualties, both…

A: The PPC is the production possibility curve which illustrates the different combinations of two…

Q: What best describes the long run? a period of time that labor can change a period longer than six…

A: The long run is a span of time during which all production parameters and costs are subject to…

Q: What is sunk cost? Provide an example of a sunk cost.Why are such costs irrelevant in making…

A: A sunk cost is the cost that is already paid and is non-recoverable.  An example is the fixed costs…

Q: What is direct cost? What is indirect cost? Provide detailed definitions and  example for both

A: The total cost of a product is generally categorized into direct and indirect costs.

Q: What is sunk cost? Provide an example of sunk cost other than one from the book and explain it. Why…

A: Cost is the expenses incurred by a person on acquiring any good or service. It is the payment done…

Q: The law of diminishing marginal returns states: Select one: a. As a firm uses more of a variable…

A: Economics deals with the supply and demand of resources. Firms emerged as primary bodies responsible…

Q: Suppose you are a producer and you need to identify what combination of labour and capital you…

A: An isoquant shows all the combinations of two inputs that a firm uses to produce any given level of…

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.