# FIU Principles of Microeconomics Worksheet

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nnxfu136

Economics

Florida International University

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1

ECO 2023 Principles of Microeconomics:
Homework Assignment #4 (Chapter 7)

Student Name
Panther ID
Institution
Course
Date

2

Answer All of The Questions Below:
Question 1:
a) Kanye's total revenues are \$25 x 70,000 = \$1,750,000.
b) Kanye's explicit costs are \$255,000 in wages, \$181,000 in lease payments, \$145,000
on drugs and alcohol, \$75,000 in paparazzi insurance, \$22,000 in utilities, and \$43,000 for office
supplies. His implicit costs are \$288,000 in opportunity cost of working for a record label and
\$75,000 in opportunity cost of investing in the stock market.
c) Kanye's accounting profit is \$1,750,000 - \$698,000 = \$1,052,000. His economic profit
is \$1,052,000 - \$363,000 = \$689,000.
d) Based on the answer in (c), it would be better for Kanye to work for a record label and
invest in the stock market.
Question 2
Suppose you are the manager for the pharmaceutical company, The Umbrella
Corporation and want to find out how productive your workers are. The table below shows the
number of workers, total output and marginal output for the company.
Number of Workers
0
1
2
3
4
5

Total Output
0
80
160
300
360
400

Marginal Product
0
80
120
140
60
40

Average Product
0
80
80
100
90
80

a)

See the table

b)

The company has increasing marginal returns for 1-3 workers.

c)

The company has diminishing returns for 4 workers and beyond.

3

Question 3
Suppose now you want to look at the costs for the company. The table below shows
various cost aspects.
Q
0
10
20
30
40
50
...

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I was having a hard time with this subject, and this was a great help.

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