Answer to Question #155921 in Microeconomics for Zarafshan

Question

1. The dean of a college faces the following costs: graders, faculty, classroom space, and chalk. Of these costs, which are likely to be variable in the long run? (5 Marks)

2. Suppose that you and your roommate have started a Bread delivery service on campus. 

a. List some of your fixed costs and describe why they are fixed. (5 Marks)

b. List some of your variable costs and describe why they are variable

Answer 1

1) Since the long run is the period of time in which all factors are variable, all costs also are variable. Thus, graders, faculty, classroom space, and chalk are likely to be variable in the long run.

2) Let's list some fixed and variable costs for bread delivery service on campus:

a) Fixed costs: costs of building where the bread is baked, costs of equipment for baking the bread. These costs are fixed because they don't depend on the quantity of production.

b) Variable costs: expenses for ingredients for bread, expenses for energy use (use of electricity). These costs are variable because they change along with the quantity production.