In what ways do implicit costs actually understate the value of economic profits, and what are some examples of implicit costs that business owners might have to consider?
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The manager of a national retailing outlet recently hired an economist to estimate the firm's production function. Based on the economist's report, the manager now knows that the firm's production function is given by Q = K^(1/2)*L^(1/2) and that capital is fixed at 1 unit. a. Calculate the average product of labor when 9 uni
You have been hired to replace the manager of a firm that uses only two inputs, capital and labor, to produce output. The firm can hire as much labor as it wants at a wage of $5 per hour and can rent as much capital as it wants at a price of $50 per hour. After you look at the company books, you learn that the compan
Please show how the problem was solved. An accountant for a car rental company was recently asked to report the firm's cost of producing various levels of output. The accountant knows that the most recent estimate available of the firm's cost function is C(Q)=100+10Q+Q(squared) Costs are measured in 1,000's of dollars & out
You are a manager for Herman Miller-a major manufacturer of office furniture. You recently hired an economist to work with engineering and operations experts to estimate the production function for a particular line of office chairs. The report from these experts indicates that the relevant production function is: Q = 2K^(1/2
Production Function is Q = 25L^1/2(K^1/2) Where: Q = Output Rate K = units of capital L = units of labor a) Suppose that the price of capital (r) is $40.00 per unit and the price of labor (w) is $160.00 per unit. If the firm wants to produce 5000 units, what is the optimal combination of inputs
Letâ??s say a perfectly competitive firm is making losses and needs to determine whether it should SHUT DOWN or CONTINUE TO OPERATE. The firm currently produces 400 units of output per day and uses 70 workers. The daily wage per worker is $100, and the price of each unit of output is $20. The cost of other variable inputs is $6
Joy Land Toys, a toy manufacturer, is experiencing quality problems on its assembly line. The marketing divisions estimates that each defective toy that leaves the plant costs the firm$10, on average, for replacement or repair. The engineering department recommends hiring quality inspectors to sample for defective toys. In this
First graph - draw the total cost curves (FC, VC, and TC) in ONE diagram. You also need to label all the axes correctly and place the legend at the bottom of your diagram. Second graph-draw the average cost curves (AFC, AVC, and ATC) plus the marginal cost (MC) in ONE diagram. Label all the axes correctly and place the legend
Here is some data on the demand for marshmallows: Price Quantity $10 100 $ 8 300 $ 6 700 $ 4 1300 $ 2 2200 (a.) Is demand elastic or inelastic in the $6-$8 price range? How do you know? [(700-300)/(700+300/2]= 4
Two manufacturers, a & b have combined demand given q=105-p there total costs are given by TCa=5qa+.5qa^2 and TCb=5qb+.5qb^2. A. If they successfully collude determine the total output and joint profits. B. If they cannot collude and instead produce where the market price equals marginal cost determine the total output
The firm currently uses 50,000 workers to produce 200,000 units of output per day. the daily wage is per worker $80, and the price of the firms output is $25. The cost of other variable inputs is $4000,000 per day. Although you do not know the firm's fixed cost, you know that it is high enough that the fims total costs exceed
1. Which of the following describes an externality and which does not? Explain the difference. a. A policy of restricted coffee exports in Brazil causes the U.S. price of coffee to riseâ?"an increase which in turn also causes the price of tea to rise. b. An advertising blimp distracts a motorist who then hits a telephone pole
A firm can produce steel with or without a filter on its smokestack. If it produces without a filter, the external costs on the community are $500,000 per year. If it produces with a filter, there are no external costs on the community, and the firm will incur an annual fixed cost of $300,000 for the filter. a) Use the Coase Th
Farm fresh, Inc, supplies sweet peas to canneries located throughout the Mississippi River Valley. Like many gain and commodity markets, the market for sweet peas is perfectly competitive. With $250,000 in fixed costs, the company's total and marginal costs per ton (Q) are TC = $250,000 + $200
Please assist with the following questions. Please show work and calculations in Excel. 1)Ethier Enterprise has an unlevered beta of 1.25. Ethier is financed with 35% debt and has a levered beta of 1.35. If the risk free rate is 6% and the market risk premium is 7%, how much is the additional premium that Ethier's shareholders
Need help in Economics involves making the best decisions. Explain how you make decisions in your life. Using an example from your personal or professional life, what are the common elements of your decision making process and how do they relate to opportunity costs
Need help in Economics involves making the best decisions. Explain how you make decisions in your life. Using an example from your personal or professional life, what are the common elements of your decision making process and how do they relate to opportunity costs?
Suppose you are the manager of a perfectly competitive firm whose short run TC=100+160Q+3Q^2. If the current market price is $196.00, which of these options is appropriate? 1)produce 5 units and continue producing 2)produce 6 units and continue producing 3)produce zero units (shut down) 4) not enough information given
Name some of the ways firms attempt to control their costs. The key here in keeping this question interesting is that reducing the workforce or having one person do the work of three people are not the only ways to control costs. I'm looking for more creative ways. Maybe you can think of some that your firm is not currently u
Three fans are to be installed at a mine site; one immediately at a price of $260,000, one in five years at an estimated cost of $310,000 and the third in eight years at a cost of $480,000. Determine the total expenditure as a present value if the annual interest rate is 10%.
A coal stripping company currently operates three dozers for reclamation work. To reduce costs three alternatives are being considered for the future: rebuild the present equipment, purchase new dozers and employ a contractor. Details of the alternatives are given overleaf: Rebuild Purchase
The market for fertilizer is perfectly competitive. Firms in the market are producing output, but are currently making economic losses. (a) How does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer? (b) Draw two graphs, side by side, illustr
8. if nominal output is 250, and the price index is 150, what is real output? 3. Calculate real growth per capita in the following countries: a. Democratic Republic of Congo: population growth = 3.0 percent; real output growth = -1.8 present. b. Estonia: population growth = -0.4 percent; real output growth = 4.2 percent.
The Western Jeans Company purchases denim from Cumberland Textile Mills. The Western Jeans Company uses 235,000 yards of denim per year to make jeans. The cost of ordering denim from the textile company is $250 per order. It costs Western $1.65 per yard annually to hold a yard of denim in inventory. Determine the optimal number
A coal producer has the following total cost function: TC=$187,500+$5Q+$0.0003Q^2 where Q is tons of coal produced per month. Calculate the firm's maximum profit if coal price is stable at $20/ton.
Would the accumulation of historical prices and quantities exchanged in the market establish a long-run supply curve? How would the historical relationship differ from how firms (and economists) envision today's long-run supply in the industry? I'm inclined to answer no to the first part of the question. To derive the compe
Burger Doodle is a fast-food restaurant that processes an average of 680 food orders each day. The average cost of each order is $6.15. Four percent of the orders are incorrect, and only 10% of the defective orders can be corrected with additional food items at an average cost of $1.75. The remaining defective orders have to be
Question: Sales are estimated to be 4,500 units annually at $3,000 each. The cost of each unit for Taylor Incorporated is $1,200. Inventory carrying cost is 5% of the cost value of the device. Order placement cost is $60. ------------------------------------------ 1. Identify the number of units to purchase. 2
I'm having a little trouble fully grasping the price-taker firm concept. I understand that there are two features of the demand facing a firm will ensure that the firm must act as a price taker: a. That other firms be willing to provide all that is demanded at the current price, and b. That consumers of the firm's output reg
Please record your answers in the Answer BOX. Thanks for your kind co-operation. ANSWER BOX Questions Answers Explanation 1.a . Explanation. 1.b Yes or No What is it? Provide justification for your choice. Thanks. 2a. N/A 2b. N/A 2c. N/A 2d. N/A 3. Working here please. Thanks.