Micro Ch13 ICA Prod
2
Name: _______ Economics – Dr. Katie Sauer Production (ch 13) 1. You are thinking of opening a hardwar e store. You estimate it wil l cost $100,000 a year to rent a storefront and $400,000 to renovate and purchase equipment . You will also have to quit your current job which pays $50,000 a year. a. What are your explicit costs of opening a hardware store? b. What are your implicit costs of opening a hardware store? c. If you estimate that your revenue in the first year will be $510,000, how much will your accounting profits be? Economic prof its? 2. Complete the table below. Number of Workers Total Output Average Product Marginal Product 0 0 2 200 4 450 7 600 11 650 Show your results on the graphs below. TP AP, MP Workers Workers
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Transcript of Micro Ch13 ICA Prod
8/3/2019 Micro Ch13 ICA Prod
http://slidepdf.com/reader/full/micro-ch13-ica-prod 1/2
Name: ___________________________________________ Economics – Dr. Katie Sauer
Production (ch 13)
1. You are thinking of opening a hardware store. You estimate it will cost $100,000 a year to rent astorefront and $400,000 to renovate and purchase equipment. You will also have to quit your current job which pays $50,000 a year.
a. What are your explicit costs of opening a hardware store?
b. What are your implicit costs of opening a hardware store?
c. If you estimate that your revenue in the first year will be $510,000, how much will your
accounting profits be? Economic profits?
2. Complete the table below.
Number of
Workers
Total
Output
Average
Product
Marginal
Product
0 0
2 200
4 450
7 600
11 650
Show your results on the graphs below. TP AP, MP
Workers Workers
8/3/2019 Micro Ch13 ICA Prod
http://slidepdf.com/reader/full/micro-ch13-ica-prod 2/2
3. Explain the average-marginal rule, using a graph and in words.
