Questions from General Economics

Q: Does a monopolistic competitor produce too much or too little output compared

Does a monopolistic competitor produce too much or too little output compared to the most efficient level? What practical considerations make it difficult for policymakers to solve this problem?

Q: How and why does a firm’s average-total-cost curve

How and why does a firm’s average-total-cost curve differ in the short run and in the long run?

Q: Define economies of scale and explain why they might arise. Define

Define economies of scale and explain why they might arise. Define diseconomies of scale and explain why they might arise.

Q: Give an example of an opportunity cost that an accountant might not

Give an example of an opportunity cost that an accountant might not count as a cost. Why would the accountant ignore this cost?

Q: Draw a production function that exhibits diminishing marginal product of labor.

Draw a production function that exhibits diminishing marginal product of labor. Draw the associated total cost curve. (In both cases, be sure to label the axes.) Explain the shapes of the two curves y...

Q: Define total cost, average total cost, and marginal cost.

Define total cost, average total cost, and marginal cost. How are they related?

Q: If Farmer Jones plants no seeds on his farm, he gets

If Farmer Jones plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 3 bushels of wheat. If he plants 2 bags, he gets 5 bushels. If he plants 3 bags, he gets 6 bushels...

Q: Suppose Honda’s total cost of producing 4 cars is $225,

Suppose Honda’s total cost of producing 4 cars is $225,000 and its total cost of producing 5 cars is $250,000. What is the average total cost of producing 5 cars? What is the marginal cost of the fift...

Q: If Boeing produces 9 jets per month, its long-run

If Boeing produces 9 jets per month, its long-run total cost is $9.0 million per month. If it produces 10 jets per month, its long-run total cost is $9.5 million per month. Does Boeing exhibit economi...

Q: Farmer McDonald gives banjo lessons for $20 an hour. One

Farmer McDonald gives banjo lessons for $20 an hour. One day, he spends 10 hours planting $100 worth of seeds on his farm. What opportunity cost has he incurred? What cost would his accountant measure...