The information below applies to a competitive firm that sells its output for $45 per unit. When the firm produces and sells 100 units of output, its average total cost is $24.5.When the firm produces and sells 101 units of output, its average total cost is $24.65. Suppose the firm is currently producing and selling 100 units of output. Should the firm increase its output to 101 units?   a. Yes, because the marginal revenue exceeds the marginal cost. b. Yes, because the marginal revenue exceeds the average total cost c. No, because the marginal cost exceeds the marginal revenue. d. No, because the average total cost exceeds the marginal revenue.

Q: Suppose a hypothetical economy is currently operating at point A on the per worker production…

A: An economy refers to the system of interrelated production and consumption activities that…

Q: What would be the suitable balance of price? (Hint: Use two-point formula) What would be the number…

A: In the coordinate system, the two-point formula is used to find the equation of a straight line. It…

Q: Illustrate and explain the effects on ONE graph of increasing population growth rates and falling…

A: The Solow growth model examines the relationships between capital accumulation, labor, and technical…

Q: Assuming perfect competition in the market for Good A, let's assume that the equilibrium market…

A: Given that good A and good B are substitutes. According to the definition of substitute goods, when…

Q: Indicators of income inequality and poverty Country Gini coefficient Australia Belgium Canada France…

A: The "Gini coefficient," which is directly linked to the Lorenz curve, is the most commonly used…

Q: Ace Alexia plays professional tennis for a living, but in spite of her big first serve, she is not…

A: Opportunity cost of playing tennis in the last year is the foregone net income that she could have…

Q: Multiple Choice Question: 1. The amount of the tax 2. The difference between the price paid by…

A: In economics, tax refers to the government tool that is used to influence the market of a specific…

Q: The quantity effect is MOST likely to dominate the price effect for a monopoly with a…

A: Demand curve is downward sloping showing that price and quantity demanded move in the opposite…

Q: After graduation, you face a choice. One option is to work for a multinational consulting firm and…

A: Accounting profit is the difference between total revenue and total explicit costs,   Economic…

Q: What is the cost in real dollars today of spending $25,000 four years from now if your effective…

A: The real cost is a cost as measured by the physical labor and materials consumed in production.

Q: Suppose that the value of money multiplier is 3 in Country A. The Central Bank of Country A made an…

A: "The entire amount of cash and other liquid assets in an economy on the measurement date is known as…

Q: Find the value of the average product at points A, B, C, and D in the graph at the right. (Your…

A: Production function shows how much output is produced using the number of workers.

Q: Please match each of the labels with the correct description. These can be purchased in order to…

A: A financial security is a type of investment instrument that represents a financial value or claim…

Q: What is the market price of a zero-coupon bond (that is, a bond that will not pay any coupon…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: Question 2 (3,2) P2 (1,-1) P1 (0, 1) What is the Nash equilibrium of the game? * (a) (B; C, F) * (b)…

A: A state of a game where each player's strategy is the best reaction to the other players'…

Q: 1.Calculate the present value of a growing annuity given the following information: annual cash…

A: Present value of a growing annuity is given as: P = PMT * (1-(1+g)n*(1+i)-n)i-gPV : Present valuePMT…

Q: Is it appropriate to evaluate a healthcare intervention using various methods of economic evaluation…

A: A healthcare intervention alludes to any move made to further develop health results or forestall or…

Q: 3. Suppose the total cost of q units produced by an increasing-cost industry is given by C(q) =q²…

A: Total cost function: C(q) = q2 + 8q The function of aggregate willingness to pay: WTP(q) = 100q -…

Q: Reference Figure 3. Assume that this is a monopolist. Assume price = P1 and output = Q2. Which of…

A: As the profit maximizing condition for the monopolist is : MR = MC The industry would face…

Q: 1. Using an example, explain how John Maynard Keynes distinguished macroeconomics from…

A: Inflation is a condition in the economy when there is a general rise in the price level of goods and…

Q: Nora's demand function for good x is x* = 2Px - 1. Her wealth is $100 and the price of good x is $5.…

A: Given Nora's demand function for good X x*=w2Px-1 Nora's wealth w =$100 Price of good x =$5 To…

Q: 12) Detail the workings of the ‘new consensus’ 3-equation model.

A: The "new consensus" 3-equation model is a system created by economists to model the macroeconomy and…

Q: 4. Suppose the aggregate demand and and aggregate supply in a competitive market are given…

A: Market equilibrium refers to the state of a market in which the demand for a particular product or…

Q: If you purchased a $1,000 General Motors (GM) 10 year coupon bond, today, with a coupon rate of a…

A: A financial market is a market for trading securities such as bonds, currencies, stocks, and…

Q: Should a firm shut down if its weekly revenue is $1,000, its variable cost is $500, and its fixed…

A: A shut down point is when the price is below Average variable cost.  The firm should shut down in…

Q: 1. Use of discretionary policy to stabilize the economy Should policymakers use monetary policy,…

A: The AD-AS model demonstrates how changes in aggregate demand and aggregate supply may alter an…

Q: The production possibilities frontiers in the figure to the right show how many bananas and coconuts…

A: Comparative advantage refers to the ability of the country or individual to produce the good at a…

Q: With no inflation, a bank would be willing to lend a business firm $5 million at an annual interest…

A: A bank willing to lend a business firm $5 million at an annual interest rate of 6 percent, when…

Q: 12) Based on the information in the table, we can conclude that, in 1932, each of the follow…

A: Banking crises occur when a large number of banks or financial institutions experience substantial…

Q: How do you decide if you need life insurance?

A: Life insurance usually provides financial security to beneficiaries in case of the policyholder's…

Q: A profitable firm becomes unprofitable following the ban of cheap plastics used in its production.…

A: The process of creating a product using various resources such as labor, capital, and materials is…

Q: Consider the case of a perfectly competitive industry with n identical firms. Each firm's total cost…

A: The over the long run, firms in perfectly competitive market will produce where the P =MC =ATC. or…

Q: For the following scenario, use the supply and demand graph to predict the resulting changes in the…

A: Loanable Funds Market: In the market for loanable funds there are economic agents like governments,…

Q: 13. Consider the case of two tourists visiting Charlottetown. One is from Montreal, and the other is…

A: GDP (Gross domestic product) refers to the monetary value of all final goods and services that…

Q: How do the life cycle hypothesis and the permanent-income hypothesis resolve the apparent…

A: The racial income gap and wealth gap are examples of the ways in which race is used to create and…

Q: Answer the following questions using the BEA Tables for US International Trade in Goods and…

A: Formula for compound annual growth rate is given as:CAGR = (FS)1/t - 1F : Final Value S : Starting…

Q: If the FED maintains a binding zero interest rate policy at full-capacity income, then the long-run…

A: Economic policy refers to the actions taken by governments and central banks to influence and manage…

Q: Figure: The Market for Loanable Funds II Reference: Ref 10-12 (Figure: The Market for Loanable Funds…

A: Equilibrium in the loanable funds market occurs at the intersection of demand and supply curves of…

Q: 7. Why are economists only interested in the spending on U.S. goods and services?

A: Economists aren't only interested in the spending on U.S. goods and services. But, the united states…

Q: 1. Unemployment is an equally serious problem for developed as well as developing economics. Please…

A: Unemployment is a serious problem for both developed and developing economies due to its negative…

Q: Show how the PPC changes given the following events by drawing in a new PPC. I have completed the…

A: A PPC is a graphical representation of the various combinations of two items that can be created…

Q: Levinn’s utility function is expressed as the following: U= C1 C2 0.3   where C1 is his first period…

A: The utility function is used to simulate people's or societies' decision-making behavior, notably in…

Q: In an oligopoly, each firm’s share of the total market is typically determined by which of the…

A: Oligopoly is a market system in which a few major companies dominate the marketplace, along with…

Q: . Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the…

A: TC = 4q  So derivating TC with respect to q we get MC MC = 4

Q: The following table summarizes the income distribution for the town of Perkopia, which has a…

A: Poverty line is the threshold or the minimum level of income considered adequate for meeting the…

Q: The diagrams below show two circumstances involving conventional air pollutants. In each case the…

A: Marginal control cost refers to the cost charged for per unit emission reduction. Marginal damage…

Q: Production Possibilities Corn Barley (Bushels) (Bushels) 2,000 0 1,600 700 1,200 1,100 800 1,400…

A: As per the Batelby’s guidelines, the first question needs to be attempted. Since resources are…

Q: The graph below depicts an economy where a decline in aggregate demand has caused a recession.…

A: The impact of change in aggregate demand due to the change in government spending is more than that…

Q: Marissa just got hired at a new job for an annual salary of $112,200. After the standard deduction,…

A: Progressive tax is the tax rate that increases with the increase in income.  The regressive tax is…

Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?