operate? What if she were to earn Suppose that Tim enters into an arrangement wi

Question

operate? What if she were to earn Suppose that Tim enters into an arrangement with a business owner to sub-lease rental space to open up a bike factory. He pays for a 12 month lease (at $400 per month) outcome of the business (and how long he would stay in the building), he will ave to pay for 6 months of his lease. What are his economic costs? Does he have any sunk costs; if so, how much? 2. up front. He signs a contract acknowledging that, regardless of the 3. Ik ea hires you as a consultant.It states that, in the short-run, its total cost function is given by: TC = 10,000 + 104 where q denotes output produced by the firm a. What is the fixed cost of the firm? b. If the firm produces 100 units of output, what are its total costs? c. If the firm produces 100 units of output, what are its average variable costs? d. If the firm produces 100 units of output, what are its average fixed costs? e. Ikea decides to open up a new production plant in Lamont. It will increase its total fixed costs by 40,000, but reduce its cost per unit (the cost associated with each unit of output) by half, to 5. What is the firm's new total cost function? What is the total cost of production if 100 units are produced? requires machines and workers to produce. The production function for each Batcopter is given by q = vTVR. Suppose that each worker is paid $10 an hour

Explanation / Answer

2) Economic cost means opportunity cost. here Tim enter into a partnership but no alternative is given by which we can calculate opportunity cost and therefore economic cost cannot be calculated. But we can calculate accounting cost which is 12*400=$4800

Sunk cost is an investment which can not recover. here 6 months lease can not be recovered. Therefore sunk cost=6*400=$2400

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