Econ 528 Module 2 Homework Assignment Solutions And Analysis Questions

1/26/2019 Module 2: Homework Assignment nb nb nb




ECON 528 MODULE 2 HOMEWORK ASSIGNMENT SOLUTIONS AND ANALYSIS
QUESTIONS



Started on nb n b n b Saturday, 26 January 2019, 11:09 PM nb nb nb nb nb




State n b n b Finished
Completed on nb n b n b Saturday, 26 January 2019, 11:35 PM nb nb nb nb nb




Time taken
nb n b n b 25 mins 42 secsnb nb nb




Question 1
Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldiloc
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nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb


Correct
ks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning
nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb n b nb nb




Marked out of 1.00
nb nb nb 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest pe
nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb




r year. In her first year, Golda spent $18,000 to rent a salon, hired a part-
nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb




time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material.
nb nb nb nb nb nb nb nb nb nb nb nb




Based on this information, what is the amount of her implicit costs?
nb nb nb nb nb nb nb nb nb nb nb




Select one: nb




a. $80,000
b. $42,000
c. $70,000
d. $41,500



Question nb 2 Accounting costs exclude implicit costs. nb nb nb nb




Correct

Marked out of 1.00
nb nb nb
Select one: nb




a. True
b. False



Question 3
Adam spent $10,000 on new equipment for his small business, "Adam's Fitness Studio." Members
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nb nb nb nb nb nb nb nb nb nb nb nb nb


Correct
hip at his fitness center is very low and at this rate, Adam needs an additional $12,000 per year to
nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb




Marked out of 1.00
nb nb nb keep his studio open. Which of the following is true?
nb nb nb nb nb nb nb nb nb




Select one: nb




a. The $10,000 Adam spent on equipment is a fixed cost of business and the $12,000 he'll ne
nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb




ed to continue operations is a variable cost.
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b. The fixed cost of running the studio is $22,000.
nb nb nb nb nb nb nb nb




c. The $10,000 Adam spent on equipment is the total cost of starting the business and the
nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb




$12,000 he'll need to continue operations is a marginal cost.
nb nb nb nb nb nb nb nb nb




d. The variable cost of running the studio is $22,000.
nb nb nb nb nb nb nb nb




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, 1/26/2019 Module 2: Homework Assignment
Question nb 4 nb nb nb




Table 11-7
nb



Correct
Quantity of nb n
Variable Cost nb Total Cost
nb
Average Total Cost
nb nb nb


Marked out of 1.00
nb nb nb Fixed Cost (dollars)
nb nb

Lanterns
b
(dollars) (dollars) (dollars)

75 200 170 370 4.93
80 200 230 430 5.36
90 200 7.67
100 200 810
115 200 11.8
117 200 1264 1464 12.5
120 200 1480


Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
nb nb nb nb nb nb nb nb nb nb nb nb nb




Refer to Table 11-7. What is the variable cost of production when the firm produces 115 lanterns?
nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb nb




Select one:nb




a. $10.05
b. $1,556
c. $956
d. $1,157



Question nb 5
Table 11-7
nb



Correct
Quantity of nb n
Variable Cost nb Total Cost
nb
Average Total Cost
nb nb nb


Marked out of 1.00
nb nb nb Fixed Cost (dollars)
nb nb

Lanterns
b
(dollars) (dollars) (dollars)

75 200 170 370 4.93
80 200 230 430 5.36
90 200 7.67
100 200 810
115 200 11.8
117 200 1264 1464 12.5
120 200 1480


Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
nb nb nb nb nb nb nb nb nb nb nb nb nb




Refer to Table 11-
nb nb nb




7. What is the average total cost of production when the firm produces 120 lanterns?
nb nb nb nb nb nb nb nb nb nb nb nb nb nb




Select one: nb




a. $14
b. $1,680
c. $72
d. $12.3


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