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greater incentive to travel

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1.) Two supermarket chains plan to merge. An adviser has argued that the merger will bring no cost reduction because the marginal costs of both firms are similar. Is this reasoning correct?

2.) 90% of a firm's energy costs of £1m are fixed but not sunk. The variable cost of energy is £2 per unit and it is currently using 100,000 units. What are its avoidable costs? i.e. how much money will it save by shutting down?

3.) You bought a car when petrol was cheaper than it is now. At present it has zero second-hand value. If you don't use the car for commuting it will still cost you £6 a day in interest (on the loan you took out to buy it) and non-refundable insurance. If you do use the car for commuting, the cost rises to £8 a day. Alternatively you can get to work by public transport for £5 a day. Purely on economic grounds, do you have a greater incentive to travel to work by car or public transport?

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1.) Two supermarket chains plan to merge. An adviser has argued that the merger will bring no cost reduction because the marginal costs of both firms are similar. Is this reasoning correct?

The reasoning may not be correct because even though they may have similar marginal costs, but the merger may provide an opportunity to cut down on ...

Solution Summary

The expert determines the greater incentive to travel in the case. The avoidable costs for Petrol are determined.

$2.19
Similar Posting

Ms. Lisa Monnin is the budget director for Nexus Media, Inc.

Please see the attached file.

1.

Ms. Lisa Monnin is the budget director for Nexus Media, Inc. She would like to compare the daily travel expenses for the sales staff and the audit staff. She collected the following sample information.

Sales ($) 131 135 146 165 136 142
Audit ($) 130 102 129 143 149 120 139

At the .10 significance level, can she conclude that the mean daily expenses are greater for the sales staff than the audit staff? What is the p-value?

2.

The management of Discount Furniture, a chain of discount furniture stores in the Northeast, designed an incentive plan for salespeople. To evaluate this innovative plan, 12 salespeople were selected at random, and their weekly incomes before and after the plan were recorded.

Salesperson Before After
Sid Mahone $320 $340
Carol Quick 290 285
Tom Jackson 421 475
Andy Jones 510 510
Jean Sloan 210 210
Jack Walker 402 500
Peg Mancuso 625 631
Anita Loma 560 560
John Cuso 360 365
Carl Utz 431 431
A. S. Kushner 506 525
Fern Lawton 505 619

Was there a significant increase in the typical salesperson's weekly income due to the innovative incentive plan? Use the .05 significance level. Estimate the p-value, and interpret it.

3.

A recent study focused on the number of times men and women who live alone buy take-out dinner in a month. The information is summarized below.

Statistic Men Women
Mean 24.51 22.69
Standard deviation 4.48 3.86
Sample size 35 40

At the .01 significance level, is there a difference in the mean number of times men and women order takeout dinners in a month? What is the p-value?

4.

The manager of a computer software company wishes to study the number of hours senior executives spend at their desktop computers by type of industry. The manager selected a sample of five executives from each of three industries. At the .05 significance level, can she conclude there is a difference in the mean number of hours spent per week by industry?

Banking Retail Insurance
12 8 10
10 8 8
10 6 6
12 8 8
10 10 10

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