7.E: Cost and Industry Structure (Exercises)
- Page ID
- 126256
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7.1: Explicit and Implicit Costs, and Accounting and Economic Profit
Self-Check Questions
Q1
Q2
Review Questions
Q3
Q4
Q5
Critical Thinking Questions
Q6
Problems
Q7
Solution
S1
S2
7.2: The Structure of Costs in the Short Run
Self-Check Questions
Q1
Quantity | Variable Cost | Fixed Cost | Total Cost | Average Variable Cost | Average Total Cost | Marginal Cost |
---|---|---|---|---|---|---|
0 | 0 | $30 | ||||
1 | $10 | $30 | ||||
2 | $25 | $30 | ||||
3 | $45 | $30 | ||||
4 | $70 | $30 | ||||
5 | $100 | $30 | ||||
6 | $135 | $30 |
Q2
Review Questions
Q3
Q4
Q5
Q6
Q7
Q8
Critical Thinking Questions
Q9
Q10
Q11
Problems
Q12
Q13
Solution
S1
Quantity | Variable Cost | Fixed Cost | Total Cost | Average Variable Cost | Average Total Cost | Marginal Cost |
---|---|---|---|---|---|---|
0 | 0 | $30 | $30 | - | - | |
1 | $10 | $30 | $40 | $10.00 | $40.00 | $10 |
2 | $25 | $30 | $55 | $12.50 | $27.50 | $15 |
3 | $45 | $30 | $75 | $15.00 | $25.00 | $20 |
4 | $70 | $30 | $100 | $17.50 | $25.00 | $25 |
5 | $100 | $30 | $130 | $20.00 | $26.00 | $30 |
6 | $135 | $30 | $165 | $22.50 | $27.50 | $35 |
S2
7.3: The Structure of Costs in the Long Run
Self-Check Questions
Q1
Q2
Q3
Review Questions
Q4
Q5
Q6
Q7
Q8
Q9
Q10
Critical Thinking Questions
Q11
Q12
Q13
Problems
Q14
Solution
S1
Labor Cost | Machine Cost | Total Cost | |
---|---|---|---|
Cost of technology 1 | 10 × $40 = $400 | 2 × $50 = $100 | $500 |
Cost of technology 2 | 7 × $40 = $280 | 4 × $50 = $200 | $480 |
Cost of technology 3 | 3 × $40 = $120 | 7 × $50 = $350 | $470 |
S2
Labor Cost | Machine Cost | Total Cost | |
---|---|---|---|
Cost of technology 1 | 10 × $40 = $400 | 2 × $55 = $110 | $510 |
Cost of technology 2 | 7 × $40 = $280 | 4 × $55 = $220 | $500 |
Cost of technology 3 | 3 × $40 = $120 | 7 × $55 = $385 | $505 |