Answer to Question #263025 in Microeconomics for mujtaba syed

Question

• True, False, or Uncertain
• Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate. Unsupported answers will receive no marks. It is the explanation that is important.
• A2-1. If a Prof leaves their $100,000 per year job to start a business that earns annual revenue $400,000, and has annual labour and rental costs of $200,000, the economic profit of the business is $200,000.
• A2-2. A decrease in the wage rate will cause a firm’s marginal cost curve to shift down.
• A2-3. For an increase in output, average costs change by more in the short-run than in the long-run, but for a decrease in output, the opposite is true.
• A2-4. If the pandemic causes firms in a competitive industry to spend $100,000 per month on safety measures (regardless of the output level), the firms bear this cost in the short-run, but consumers bear it in the long-run. 

Answer 1

A2-1 .True.

Since he had had the remainder of his $200 000 paychecks at his discretion, he had had very little to invest it on. Only he may determine how much to pay as the value of his labour.

A2-2. Uncertain

         This is since there is movement along with it.

A2-3. True

           Since the similar value of fixed costs is distributed over a more excellent range of production units, the overall fixed price drops as the aggregate quantity of items of the well-manufactured rises.

A2-4. False

           If an outbreak compels a dynamic sector to spend $100,000 per month on protective precautions, the businesses and consumers will pay the price in the long term.