Use the “Supply and Production Costs,” worksheet and the economic concepts discussed in Chapters 6 and 7 of Economics of Health and Medical Care to answer the following questions.

Use the “Supply and Production Costs,” worksheet and the economic concepts discussed in Chapters 6 and 7 of Economics of Health and Medical Care to answer the following questions. You will use the table found in the worksheet to calculate and fill in the blanks for the table in Question 5.

Explain the difference between explicit and implicit costs of production.

Explicit costs of production are actual costs incurred and recorded in the books of account. They are direct costs that involve the outflow of cash from the business. The costs are incurred in the normal course of business, including the…

Explain the reasoning behind the U-shaped, long-run, average cost curve.

The average costs are higher at low levels of production since both the Average Variable (AVC) Costs and Average Fixed Costs (AFC) are high. However, as the firm increases the output levels, the average costs decrease significantly due to the continued decline in AVC and AFC. This results from availability of factors..

Explain the law of diminishing marginal returns.

Law of diminishing marginal returnsstates that if a variable factor is increased while others are held constant, a point is reached where continued increase of that variable input causes output to increase at diminishing…

Describe economies and diseconomies of scale.

Economies of scale is a concept that means the cost advantages enjoyed by a business as a result of expanding its production in the long…

Given the following data, calculate the total fixed, total variable, and marginal costs at each level of production.