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Output & Costs

The XYZ company

The XYZ company produces output using labor (which it purchases on an as-needed basis in the market for unskilled workers at a wage of $5 per hour) and one machine (which it is obligated to lease at a rental rate of $300 per hour ). The planning horizon precludes XYZ from renting or purchasing any additional machines, as the cu

Managerial Economics - Clarification

13. Suppose that the firm's Production Data is given in the following schedule (where Q is the level of output). Workers Output Q (units) 0 0 1 600 2 1000 3 1290 4 1480 5 1600 6 1680 If P=$50 and w=$14,500, how many workers should the firm hire to maximize profits? Workers Output (Q) MPL 0 0 --- 1 600 600 2 10


Use an isoquant/isocost diagram and words to show how firms will respond to a decrease in the wage rate. Be sure to identify the short run scale effect and the long run substitution effect.

Short-run marginal cost curves

1. If the government imposes a $1 per-unit tax, how do the marginal, average total, and average variable costs change? What if instead the government imposes a $100 per-firm tax? 2. a) Why are short-run marginal cost curves expected to slope upward? b) If you know that average costs are increasing, is the marginal cost

Resolve problems using Lagrangian Multiplier

Please show steps to resolve these problems please use Lagrangian Multiplier if possible. 1. A manufacturer has the following production function: Q=100 K^. 2 L^. 9 If the price per unit of labor is $20 and the price per unit of capital is $10, a) What is the optimal combination of labor and capital to use in order t

Economics Problems

See attached file for full problem description. 1. This graph illustrates the demand for computers in a small country. To develop a domestic computer industry, the government prohibits imports of computers and gives a single local firm the right to produce and sell computers. The demand curve shows the local demand for comput

Monopolistic competition

An industry with one very large firm and 100 very small firms experiences an increase in the demand for its product. Use the dominant firm model to explain the effects on the price, output and economic profit of: a. The large firm b. A typical small firm

Production function, Cost Function, MC, AC

You manage a plant the mass produces engines by teams of workers using assembly machines. The technology is summarized by the production: q = 5KL Where q is the number of engines per week, K is the number of assembly machines and L is the number of labor teams. Each assembly machine rents for r = 10,000$ per week and each

Suppose the firm can produce 5000 units of out put by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5000 units of output?

Answer the following questions on the basis of this information for a single firm: total Cost of capital = $1000; price paid for labor = $12 per labor unit; price paid for raw materials = $4 per raw-material unit. a. Suppose the firm can produce 5000 units of out put by combining its fixed capital with 100 units of labor and

I am having problems trying to solve the following problem. Please provide me with detailed step-by-step solutions. Suppose that a firm's production function is Q = 10 L 0.5 K 0.5 The cost of a unit of L is 20$ and user cost of capital is 80$. a) The firm is currently producing 100 units of output and has determined that

Best Way to Enter the International Market

1. If you were to run a company that made a realy cool gadget (e.g. MP3 player, all-in-one phone, pen-sized camera, etc.) and you decided it was time to enter the international market, which strategy would you utilize? (Export/import, Management Contracts, Licensing, Franchising, Joint Venture/Strategi Alliance, Wholly Owned S

2 macro problems

One question involves Y=C+G+I+NX. GDP, GNP another one involves: savings and investments (See attached file for full problem description)


Jockey Co. has a cost of equity capital estimated to be 15%. They have a current dividend of $3 per share and analysts expect the dividend to grow at a rate of 25% a year for the next 3 years, and then it will grow at a constant rate of 10% per year. What is the current stock price of Jockey Co.?

Price Discrimination

There is a firm that has pricing control of its output and is able to identify its consumers into two groups. The total quantity demanded for its output is the summation of the quantity demanded by the two groups, therefore Qtotal = Q1 + Q2 where Qtotal is the total quantity demanded, Q1 is the quantity demanded by group 1, and

Mud Construction Co

I cannot find any help in the textbook for this problem. As I'm taking an online course, finding alternative forms of help proves difficult. Here's the problem: Mud Construction Co. is considering buying new equipment with a cost of $625,000 and a salvage value of $50,000 at the end of its useful life of ten years. The equi

Production function, FC, VC, AC, AVC, MC

Suppose a firm faces a cost function of the form : C (y) = 8 + 4y + y ^ 2 a) What is the firm's fixed cost, FC? b) What is the firm's variable cost, VC? c) What is the formula for the average cost, AC? d) What is the formula for the average variable cost, AVC? e) What is the formula for the marginal cost, MC? f) On a

Economics and management

19. The net present value of a project is calculated as follows: A. the future value of all cash inflows minus the present value of all outflows B. the sum of all cash inflows minus the sum of all cash outflows C. the present value of all cash inflows minus the present value of all cash outflows

Microeconomics: Maximizing Profits

Profit Maximization -------------------------------------------------------------------------------- A monopolistic firm operates in two seperate markets. No trade is possible between market A and market B. The firm has calculated the demand functions for each market as follows: Market A p = 15 -Q Market B p = 11 -Q

Average cost of capital

The current interest rate on new debt is9%. The firm's marginal tax rate is 40%. It's capital structure, considered to be optimal, is as follows: Debt $104,000,000 Common equity $156,000,000 Total liabilities and equity $260,000,000 A.

Does More GDP make more people happier?

1. How can real GDP per person be higher in one country than in another even if the first country has lower aggregate reeal GDP than the second? 2. Under what circumstances might a significant rise in nominal GDP per person lead to a widespread of reduction in overall life satisfaction, after taking into account marital hap

Making a Business Decision: Expand, Leave or Shut Down

Question: You have opened your own word-processing service. You bought a personal computer, and paid $5, 000 for it. However, due to the cost changes in the computer industry, the current price of an equivalent machine is $2,500. You could sell any used machine for $1,000. If you were not word processing, you could earn $20,00

What is market efficiency?

1. When the CR = 80%, is the market efficient when the market behavior follows the price leadership model? 2. When the CR=80%, is the market efficient when the market behavior follows the contestable markets model? Price leadership -setting a price w/the expectation that the other firms match the leader's price cont

3 part problem involving Externalities

Wilbur and Orville are in a dispute. Orville would like to fly his planes while Wilbur does not want to have the value of his house decreased due to the noise. Use the information in the table to help them solve the problem. # of Flights Total Profits Marginal Profits Value of Wilbur's House 1 $1000

Cost-output relationships

For each of the following cost-output relationships, describe the shape (U-shape, decreasing, increasing, constant) of the average total cost and marginal cost functions (C = total cost, Q = output): (1) C = 42,500,000 + 2550Q (2) C = 8.48 + 0.65Q + .00220Q2