ECON 200 EXAM 2 UNL UPDATED TEST PAPER SOLVED QUESTIONS FULL SOLUTION PACK

ECON 200 EXAM 2 UNL UPDATED TEST
PAPER SOLVED QUESTIONS FULL
SOLUTION PACK

●● Explicit Costs.
Answer: monetary payments
Ex. rent, labor


●● Implicit Costs.
Answer: -value of next best use
-self-owned resources
-includes normal profit
ex. opportunity cost


●● Accounting profit.
Answer: = Revenue- explicit costs


●● Economic profit.
Answer: =Accounting profit-implicit costs


●● Economic profit (to summarize).

,Answer: =total revenue- economic cost
=total revenue -explicit costs-implicit costs


●● Short run.
Answer: -some variable inputs
-fixed plant


●● long run.
Answer: -all inputs are variable
-variable plant
firms enter and exit


●● Short-Run Production Relationships.
Answer: - total product (TP)
-Marginal Product (MP)
-Average product (AP)


●● Marginal Product.
Answer: = change in total product/change in labor input


●● Average product.
Answer: = total product/units of labor

, ●● Law of Diminishing Returns.
Answer: - resources are of equal quality
- technology is fixed
- variable resources are added to fixed resources
-at some point, marginal product will fall
-rationale


●● Fixed costs(TFC).
Answer: costs do not vary with output


●● Variable costs (TVC).
Answer: costs vary with output


●● Total costs (TC).
Answer: -sum of TFC and TVC
-TC=TFC+TVC


●● Average Fixed Costs.
Answer: AFC= TFC/Q


●● Average variable costs.