Exam 13: The Costs of Production

Scenario 13-7 Julia prepares tax returns and does bookkeeping. Last year her revenues from the tax and bookkeeping business were $150,000, and her expenses for the business were $15,000. When she started her tax and bookkeeping business, Julia gave up her supplemental job doing in-home pet sitting. She used to earn $10,000 per year from pet sitting. Assume that she incurred no costs for her pet sitting business. -Refer to Scenario 13-7. Julia's accounting profits are

Explicit costs

Consider a small hair styling salon. List some examples of explicit costs of this business.

The marginal-cost curve intersects the average-fixed-cost curve at the minimum of marginal cost.

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Figure 13-2 -Refer to Figure 13-2. The graph illustrates a typical

Scenario 13-6 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 13-6. Ziva's accountant would calculate the total cost for the day of farming to equal

​​​Table 13-7 -​Refer to Table 13-7. ​What is total output when 1 worker is hired?

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9. This firm experiences diseconomies of scale at what output levels?