Assume the price of baseballs is $5 and baseball gloves is $20. Assume you have

Question

Assume the price of baseballs is $5 and baseball gloves is $20. Assume you have $100 total to spend on these items. Construct a table similar to the one on page 159. What is the point based on the Equimarginal Rule which has equal marginal benefit (or the closest) for the two purchases? The short Run Average Total cost (SATC) curve is shaped like The Long Run Average Total Cost Curve (LATC) is shaped like What causes the different shape? Discuss a firm's objective relative to its economic cost. Describe each of the firms economic cost and whether these would be considered explicit or implicit. What is the difference between an economic profit an accounting profit give an example? Critical Thinking: Human beings are odd creatures. We can predict the negative consequences of certain actions and yet we proceed with those actions. If people were logical and thought long term no one would eat more than fruit, no one would start smoking no one would fail to save money for their retirement. So, why do so many people have bad eating habits, addictive behavior and no savings? What does neuroscience tell us about this behavior?

Explanation / Answer

2.

SATC curve is shaped like U, because of the law of diminishing returns. As long as AVC falls SATC also tends to fall and then rises since AVC rises too.

LATC is shaped like L, because per unit cost falls and then fixed as technology and skills improve in the long-run.

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