insert Table Chart TextShapeMedis Comment 1. Explain the relationship between th
ID: 1143351 • Letter: I
Question
insert Table Chart TextShapeMedis Comment 1. Explain the relationship between the price changes and total revenue, describing the importance of elasticity of demand. If a firm raises its price, its total revenue will faces is If a firm lowers its price, its total revenue will faces is (increase/decrease) if the demand curve it (elastic/inelastic). (increase/decrease) if the demand curve it (clastic/inelastic). 2. Explain the difference between accounting profits and economic profits, defining both terms. There is a "Solman" video in the Ch. 5 folder that does a good job explaining this. 3. Answer the 3 questions below based upon the following information. Assume that in a hypothetical economy with full employment and fixed resources and technology, the following amounts of manufacturing and service goods can be produced in a year. Manufacturing Goods (millions) Manufacturing goods Service Goods (Millions of units) (Millions of units 60 20 34 50 40 30 40 48 50 10 30 10 0 10 20 30 40 50 60 Service Goods (millions) a. What is the opportunity cost of increasing the production of manufacturing goods from 20 million b. Is it possible for this economy produce 40 million manufacturing goods and 30 million service c. Is it possible for this economy produce 35 million manufacturing goods and 10 million service to 34 million is million units of goods? (It may help to draw in the production possibilities frontier.) Why or why not? goods? combination represent? (lt may help to draw in the production possibilities frontier.) What does thisExplanation / Answer
1) If a firm raises its price then total revenue will increase if the demand curve is faces is inelastic
If a firm raises its price then total revenue will decrease if the demand curve is faced is inelastic.
If firm lowers its price then total revenue will rise if demand is elastic and total revenue will fall of demand is inelastic.
2)Implicit cost is the opportunity cost of self owned factor of production
Explicit cost is the cost of the factor of production that are purchased from the market
Economic cost=TR-Explicit cost -implicit cost=Accounting profit-Implicit cost.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.