I need some Economics Help.

Question

You are the manager of a firm that sells widgets. Due to the poor economy, the demand for your product has dropped by half

and you are now producing about 2 million widgets per year. Your sales manager has found a potential client that is willing to

pay $90 each for 1 million widgets, which would bring your total production up to 3 million units.

You would not have to change the price you charge your other customers if you accept this offer.

Your accounting department has given you the following information about average costs of producing widgets:

Number of units/ 2 million 3 million 4 million

Per Unit Costs

Average variable costs:

Materials $60 $60 $60

Labor $20 $20 $20

Average fixed costs:

Depreciation $60 $40 $30

Average total cost $140 $120 $110

Which of the following answers best explains how an economist would view the decision to accept or reject the offer?

Question 2.

When the marginal cost of another unit of output is greater than the current value of average total cost, producing another unit of output will:

Question 3

A street vendor's explicit costs of selling sandwiches from a truck do not include which of the following

Question 4

Which of the following is NOT true about the externalities created by smog produced from driving cars?

Question 5

The Coase Theorem says that problems created by lack of property rights can be resolved by those affected as long as:

Answer 1

Q1:

You have constant MC=$80 thus this is profitable deal and it should be accepted (b/c MR=$90).

Q2:

If MC>ATC then next output will increase ATC

Q3:

Provide list of options.

Q4:

List required.

Q5:

to someone - it doesn't matter who because allocation will go best efficient way automatically.