are: A. total revenue minus total cost. B. total cost minus total revenue. C. marginal revenue minus total cost. D. total revenue minus marginal cost. 4. Economic profits are: A. total revenue minus total cost. B. marginal revenue minus marginal cost. C. total revenue minus total opportunity cost. D. total profits of the economy as a whole. 5. Which of the following is an implicit cost to a firm that produces a good or service? A. labor costs. B. costs of operating production machinery
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A. | total revenue minus total cost. | B. | total cost minus total revenue. | C. | marginal revenue minus total cost. | D. | total revenue minus marginal cost. | | 4. | Economic profits are: A. | total revenue minus total cost. | B. | marginal revenue minus marginal cost. | C. | total revenue minus total opportunity cost. | D. | total profits of the economy as a whole. | | 5. | Which of the following is an implicit cost to a firm that produces a good or service
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separate approaches. The first is Total Revenue to Total Cost and profit maximization is derived by taking the total revenue and subtracting the total cost at each quantity level. Profit maximization is at the point where the gap is the largest between TR and TC. The second approach is Marginal Revenue to Marginal Cost. In this approach profit maximization is obtained by determining where MR is equal to MC. B. In the table below, the Marginal Revenue was calculated by the change in total revenue
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1. Do managers often find it difficult to minimize costs? Yes. In this case, it is very hard for manager to minimize costs due to a large number of freight yards and the difficulty of distributing of them over long distances. It is impossible for managers to have each day a reasonable complete knowledge of what happened at each yard. They must examine selected data concerning the performance of the yards during the day, and from these data they must evaluate a yard's performance. In evaluating performance
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intended to be a long-term pricing strategy, since prices set this low cannot be expected to offset the fixed costs of a business. The variable cost of a product is usually only the direct materials required to build it. Direct labor is rarely completely variable, since a minimum number of people are required to crew a production line, irrespective of the number of units produced. The Marginal Cost Calculation ABC International has designed a product that contains $5.00 of variable expenses and $3.50
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best approach to valuing the environmental impact (externality) to be considered during the selection of new power generation sources by electric companies. Two approaches have been proposed: 1. The implied valuation approach- This uses the marginal cost of pollution control, imposed by regulators as a proxy for estimating the externality. 2. The damage valuation approach- This approach calculates the actual damages caused by residual emissions of pollutants. The MDPU had prescribed the implied
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production cannot be changed. As time goes by, the firm has the opportunity to change the levels of all inputs. In the long-run production function, all inputs are variable. 2. Why is the marginal product of labor likely to increase initially in the short run as more of the variable input is hired? The marginal product of labor is likely to increase initially because when there are more workers, each is able to specialize on an aspect of the production process in which he or she is particularly
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rather than by mass advertising? Answer Selected Answer: A pharmaceutical which can only be understood by doctors Correct Answer: A pharmaceutical which can only be understood by doctors Which of the following is considered to be a cost of information? Answer Selected Answer: The time spent to collect the information. Correct Answer: The time spent to collect the information. Decision makers who try their best for rationality but are constrained by limited information
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maximization occurs when the difference between total revenue and total cost is the largest. 2. Profit maximization occurs when marginal cost equals marginal revenue. B. Explain the calculation used to determine marginal revenue. 1. Discuss how marginal revenue increases, decreases, or remains constant in the given scenario. Marginal Revenue is calculated by the change in total revenue from producing an additional unit of output. The marginal revenue in the given scenario decreases. Each time the change
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Cell Phone Company Clair Smith ECO/561 March 17, 2014 Cell Phone Company Cell phones have evolved over the years since 1973 when Dr. Martin Cooper while working for Motorola invented the first personal handset (Keith, 2004). In 1988 another important event occurred for the cell phone industry, which is when The Cellular Technology Industry Association is formed (Keith, 2004). The association is what helped form the cellular industry into the empire it is today (Keith, 2004). Cell phones are
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