- 7.1: A firm had sales revenue of $1 million last year. It spent $600,000...
- 7.2: Continuing from Exercise 7.1, the firms factory sits on land owned ...
- 7.3: The WipeOut Ski Company manufactures skis for beginners. Fixed cost...
- 7.4: Based on your answers to the WipeOut Ski Company in Exercise 7.3, n...
- 7.5: If two painters can paint 200 square feet of wall in an hour, and t...
- 7.6: Return to the problem explained in Table 7.13 and Table 7.14. If th...
- 7.7: Suppose the cost of machines increases to $55, while the cost of la...
- 7.8: Automobile manufacturing is an industry subject to significant econ...
- 7.9: What are explicit and implicit costs?
- 7.10: Would you consider an interest payment on a loan to a firm an expli...
- 7.11: What is the difference between accounting and economic profit?
- 7.12: What is a production function?
- 7.13: What is the difference between a fixed input and a variable input?
- 7.14: How do we calculate marginal product?
- 7.15: What shapes would you generally expect a total product curve and a ...
- 7.16: What are the factor payments for land, labor, and capital?
- 7.17: What is the difference between fixed costs and variable costs?
- 7.18: How do we calculate each of the following: marginal cost, average t...
- 7.19: What shapes would you generally expect each of the following cost c...
- 7.20: Are there fixed costs in the long-run? Explain briefly.
- 7.21: Are fixed costs also sunk costs? Explain
- 7.22: What are diminishing marginal returns as they relate to costs?
- 7.23: Which costs are measured on per-unit basis: fixed costs, average co...
- 7.24: What is a production technology?
- 7.25: In choosing a production technology, how will firms react if one in...
- 7.26: What is a long-run average cost curve?
- 7.27: What is the difference between economies of scale, constant returns...
- 7.28: What shape of a long-run average cost curve illustrates economies o...
- 7.29: Why will firms in most markets be located at or close to the bottom...
- 7.30: Small Mom and Pop firms, like inner city grocery stores, sometimes ...
- 7.31: A common name for fixed cost is overhead. If you divide fixed cost ...
- 7.32: How does fixed cost affect marginal cost? Why is this relationship ...
- 7.33: Average cost curves (except for average fixed cost) tend to be U-sh...
- 7.34: What is the relationship between marginal product and marginal cost...
- 7.35: It is clear that businesses operate in the short run, but do they e...
- 7.36: Return to Table 7.2. In the top half of the table, at what point do...
- 7.37: How would an improvement in technology, like the high-efficiency ga...
- 7.38: Do you think that the taxicab industry in large cities would be sub...
- 7.39: A firm is considering an investment that will earn a 6% rate of ret...
- 7.40: Return to Figure 7.7. What is the marginal gain in output from incr...
- 7.41: Compute the average total cost, average variable cost, and marginal...
- 7.42: A small company that shovels sidewalks and driveways has 100 homes ...
Solutions for Chapter 7: Production, Costs, and Industry Structure
Full solutions for Principles of Economics | 2nd Edition
the tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party
a visual model of the economy that shows how dollars flow through markets among households and firms
the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own
two goods for which an increase in the price of one leads to a decrease in the demand for the other
a decrease in investment that results from government borrowing
the property of society getting the most it can from its scarce resources
above-equilibrium wages paid by firms to increase worker productivity
a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants
the field that studies how people make decisions regarding the allocation of resources over time and the handling of risk
financial institutions through which savers can directly provide funds to borrowers
an increase in the overall level of prices in the economy
the increase in output that arises from an additional unit of input
a group of buyers and sellers of a particular good or service
natural level of output
the production of goods and services that an economy achieves in the long run when unemployment is at its normal rate
two goods with straight-line indifference curves
a legal maximum on the price at which a good can be sold
goods that are both excludable and rival in consumption
a tax for which highincome and low-income taxpayers pay the same fraction of income
society’s understanding of the best ways to produce goods and services
Tragedy of the Commons
a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole