HOMEWORK: Chapter 20 Homework

For this assignment please answer the following questions and then submit them below. These answers can be hand written but must be legible, or they can be typed. If answers require calculation all work must be provided for full credit. If students choose to only provide the answer no credit will be given.

Fill-in-the-blanks:

1. A ____________________  cost is a past cost that cannot be changed by current  decisions.

2. The ____________________  run is a period in which at least one input is fixed.
3. ____________________ costs are costs that do not vary with output.

True or False:

4. Zero economic profit is the same thing as zero accounting profit.

5. Sunk costs are crucial to making current decisions.

6. As larger amounts of a variable input are combined with fixed inputs, eventually the

      MPP of the variable input declines.

Multiple Choice: Show all work.

7. ____ If five workers can produce 800 units and six workers can produce 900 

               units, the marginal physical product of the sixth worker is:

1. 100 units
2. 150 units
3. 800 units
4. 900 units