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Output & Costs

Stages of Production

Problem 2. A firm has following short-run production function: Q=50L+6L^2-0.5L^3 Q=quality of output per week L= number of worker a. When dose the law of diminishing returns take effect? b. Calculate the wage of the values for labor over which stage I, II, and III occurs. C. Assume each worker is paid $10 per hour a

Externalities, Public Goods, Imperfect Information, and Social Choice

1. Which of the following industries would you classify as an oligopoly? Which would you classify as monopolistically competitive? Explain your answer. If you are not sure, what information do you need to know to decide? a. Athletic shoes b. Restaurants c. Watches d. Aircraft e. Ice cream 1) How does a firm in an oligo

Using Weighted Average Delay

A mail-order firm processes 5,000 checks per month. Of these, 65% are for $50 and 35% are for $70. The $50 checks are delayed two days on average; the $70 checks are delayed three days on average. a. What is the average daily collection float? How do you interpret your answer? b.What is the weighted average delay? use the res

Value of Lockboxes

Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following: Average number of payments per day 400 Average value of payment $1,400 Variable lockbox fee (per transaction) $ .75 Daily interest rate

Different types of costs

Determine the difference between Total Variable Costs (TVC), Average Variable Costs (AVC) and Marginal Costs (MC). What do we mean by these different types of costs? How are they calculated? What would be an example of each?

Heckscher-Ohlin theory

Please Provide an Elaborate answer as long as possible. I need to understand these concepts for future exams and i cannot answer such questions. (a) Explain what is meant in the Heckscher-Ohlin theory by (i) The relative factor intensity of a commodity, (ii) the relative factor abundance of a country. (b) How ar

Explain why productivity gains are so important to GM

Assume labor costs are 17.5% of revenue per vehicle for General Motors. In union negotiations during the late 1990s, GM attempted to cut its workforce to increase productivity. Together with the job reductions they planned, GM officials hoped to make the company's North American operations fully competitive with its U.S. and Ja

Perfectly Competitive Firm and Market Price

1. Government intervention may be required to correct market outcomes because of: a) externalities b) market power c) public goods d) all of the above 2. The optimal mix of output may not be produced by an economy because of the existence of: a) monopolies b) externalities c) public goods d) all of the abo

Economics

An oligopoly exists with two firms, A and B. The demand function for these oligopolists is Q=1000-40P. a. If firm A's cost function is TC=3000+7Q, what quantity (Qa) will it produce and price (Pa) will it charge to maximize profits? b. If firm B's cost function is TC=3000+5Q, what is this firm's profit or loss? c. Which

PRODUCTIVITY USING OLD AND NEW SYSTEM

(Prob. 1: Productivity) A company has introduced a process improvement that reduces processing time for each unit, so that output is increased by 25% with less material, but one additional worker required. Under old process, five workers could produce 60 units per hour. Labor costs are $12/hour, and material input was previou

Finance - Merger gains, Mergers and P/E Ratios, Stock versus Cash Offers.

6. Merger Gains. Acquiring Corp. is considering a takeover of Takeover Target Inc. Acquiring has 10 million shares outstanding, which sell for $40 each. Takeover Target has 5 million shares outstanding, which sell for $20 each. If the merger gains are estimated at $25 million, what is the highest price per share that Acquiring

Material quantity variance

See attached file for full problem description. You have just been hired as a managerial accountant. You are responsible for variance analysis for direct materials required in the manufacturing of polo mallets. An old college friend called and asked you to lunch. You raced out the door before finishing the cost analysis fo

Determine whether to sell or process further

See attached file for full problem description. E6-7 Shynee Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Sarco, Barco, and Larco. Each of these products can be sold as is, or it can be processed further and sold for a

Your manager comes in with three sets of Laurentia, Rodinia, Ediacaran faunas.

Your manager comes in with three sets of proposals for a new production process. Each process uses three inputs: land, labor, and capital. Under proposal A, the firm would be producing an output where the MPP of land is 30, labor is 42, and capital is 36. Under proposal B, at the output produced the MPP would be 20 for land, 35

Pure Monopoly Calculation

Use the following data for a pure monopoly to calculate the firm's: (a) total revenue, marginal revenue, marginal costs, and average total cost; (b) its profit-maximizing output level and produce price; (c) its profit. (d) Use the price-cost formula to determine whether or not the firm's operations are productively-efficient.

Manager of the only renting construction equipment in NY

As manager of the only renting construction equipment in NY, it has been observed that the demand through Thursday to Saturday in much higher that it is on Sunday through Wednesday. The demand for equipment during the weekends is: P=10-0.1 Q And the demand during the weekdays is P =25-Q What pricing strategy you suggest t

Managerial Economics

Is the following sentences true or false and why (please give mathematical or graphical explanation when needed)? 1. Empirical studies often indicate that the long- run average cost curve for PC industry is J -shaped 2. a profit- maximizing monopolist will always choose on output in the short run where the average total c

The term "diminishing returns" refers to

The .... is the increase in output obtained by hiring an additional worker. a. average product b. total product c. marginal product d. marginal cost my answer is D The term "diminishing returns" refers to a. falling interest rate that can be expected as one's investment in a single asset increases b. reduction in pro

Strategic Decision Making in Oligopoly Markets

Thomas Schelling, an expert on nuclear strategy and arms control, observed in his book The Strategy of Conflict (Cambridge, MA: Harvard University Press, 1960), "The power to constrain an adversary depends upon the power to bind oneself." Explain this statement using the concept of strategic commitment. In the 2000 US presid

The internal rate of return on a project can be found

1.The internal rate of return on a project can be found A.by discounting all cash flows at the cost of capital B.by averaging all cash inflows, and calculating the interest rate which will make them equal to the average investment C.by calculating the intersest rate whuch will equate the present value of all cash inflows to t

ECON practice questions

1. Which of the following is a relevant cost? A. Replacement cost B. Sunk Cost C. Historical Cost D. Fixed Cost E. All of the above are relevant costs 2. Which of the following cost relationships is not true? A. AFC = AC - MC B. TVC = TC - TFC C. the change in TVC divided by the change in Q = MC D. The change in TC d

Average total cost is

Average total cost is a. the change in cost divided by the change in output b. total cost divided by output c. the change in output divided by the change in costs d. total cost times output my answer is A when an increase in the firm's output reduces its long run average cost, it experiences a. economic of scale b.