ECO HW 5
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May 23, 2024
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HW5, Spring 2023
Read the articles on Megaships, Solyndra, Chicken Farming, and automation at WalMart and respond to the questions below. You should type your answers and upload to Canvas prior to the due date.
Megaships
1.
Why did companies, such as Maersk, initially develop these megaships? The idea was that if you crammed more containers onto less carriers then you would save on fuel and labor costs, while concentrating more loads into fewer port calls also will save time and operating costs.
2.
According to the article, are these megaships actually saving companies money? Explain using examples from the article.
The research and policy-coordination group says the ships have led to overcapacity and steep
price cutting that will put financial pressure on container ship operators for several years. “The development of the world container fleet over the last decade is completely disconnected from developments in global trade and actual demand,” the OECD report says, citing research by McKinsey & Co. that estimates a 20% gap between shipping capacity and demand that will persist until at least 2019. “The effect of this overcapacity is low freight rates, which will undermine the profitability of the container shipping sector.”
Solyndra
1.
Read the article on Solyndra, paying particular attention to the paragraph about 3,000 workers building a larger factory. What is going on with Solyndra? What happened to their costs with the new factory? What mistake did they make?
Solyndra was given a loan by the US government to help them build a new factory with higher capacity for making solar energy tubes. The problem was that the new factory increased fixed costs and not enough people were buying the solar tubes. The old factory they were using was also inefficient because it was more
expensive to produce the product then they could sell for it. The mistake they made was taking the loan from the government, because that also caused investors not to buy into the comnapny because if it failed the government would be first in line to claim its loan.
Chicken Farming
While the farmer makes revenue from farming alligators, this was not his motivation for adding alligators to his existing chicken farm. His motivation was to save money/reduce costs.
1.
How does the presence of alligators reduce the costs of farming chickens?
Because it’s the most natural form of recycling, use the dead chickens from the farms to feed the alligators. Then he sells the alligators hide to companies in Italy who use it for clothing and other luxury goods. 2.
How does the presence of chickens reduce the costs of producing alligators? Because you’re not spending money on feeding them. Instead you’re recycling. Labor-Capital Substitution; Thought Question
1.
When you think about automation in the labor market (that is, the substitution of human labor for robots/technology), what type of industries and/or occupations come to mind?
Car companies, technology companies, manufacturing companies
2.
Read the article on automation at Walmart. Based on you reading of the article, how would you summarize the types of tasks that are being automated?
Walmart Inc. is expanding its use of robots in stores to help monitor inventory, clean floors and unload trucks, part
of the retail giant's efforts to control labor costs as it spends more to raise wages and offer new services like
online grocery delivery.
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Use the accompanying graph to answer the following questions. Assume the company makes 83,000 parts per month of Product A and 39,000 parts per month of Product B.
Click the icon to view the provided graph.
(a) Which Product has the higher variable cost, and what is this value in units of dollars per part?
Product B has the higher variable cost. This value is $.50 /part. (Type an integer or a decimal. Round y
(b) Which Product has the higher selling price, and what is this value in units of dollars per part?
Product B has the higher selling price. This value is $ 1.69 /part. (Type an integer or a decimal. Round
(c) Which Product has the faster breakeven time, and what is this value in units of months?
Product B has the faster breakeven time. This value is 22 month(s). (Type a whole number.)
(d) At 6 years, which Product makes more profit and what is this value in units of dollars?
At 6 years Product A makes more profit. This value is $4,850,000. (Type a whole number.)
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Product demand and processing times for the equipment is given below:
Product
Annual Demand
Processing Time (minutes)
1.
10,000
6.
2
20,000
3
25.000
4
What is the total processing time required per year?
If the machines will operate for 8 hours per day for 250 days per year. how many machines do you need?
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\table[[\table[[Output], [per], [Month]], Price, \table[[Total], [Revenue]], Total Cost,Total Profit, \table [[Marginal], [
Revenue**
Output
per
Month
Price
0
$1,000
100
Total
Revenue
$0
1,000 100,000
Total Cost Total Profit
Marginal Revenue* Average
Revenue*
Profit per
Cost Total Cost
Unit (Price -
ATC)
$60,000 -$60,000
90,000
10,000
$1,000
$300
$900
$100
200
1,000 200,000
130,000
70,000
1,000
400
650
350
300
1,000 300,000
180,000
120,000
1,000
500
600
400
400
1,000
400,000
240,000
160,000
1,000
600
600
400
500
1,000
500,000
320,000
180,000
1,000
800
640
360
600
1,000 600,000
420,000
180,000
1,000
1,000
700
300
700
1,000 700,000
546,000
154,000
1,000
1,260
780
220
800
1,000 800,000
720,000
80,000
1,000
1,740
900
100
900
1,000
900,000 919,800 -19,800
1,000
1,998
1,022
-22
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Time
Total Problems Answered
8:00 AM
0
9:00 AM
100
10:00 AM
175
11:00 AM
225
Noon
250
Use the table to answer the following questions.
The marginal, or additional, gain from Eileen’s second hour of work, from 9:00 AM to 10:00 AM, is
problems.
The marginal gain from Eileen’s fourth hour of work, from 11:00 AM to noon, is
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Time
Total Problems Answered
8:00 AM
0
9:00 AM
20
10:00 AM
35
11:00 AM
45
Noon
50
Use the table to answer the following questions.
The marginal, or additional, gain from Alex’s second hour of work, from 9:00 AM to 10:00 AM, is
problems.
The marginal gain from Alex’s fourth hour of work, from 11:00 AM to noon, is
problems.
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Typed and correct answer please. I ll rate
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Time
Total Problems Answered
8:00 AM
0
9:00 AM
40
10:00 AM
70
11:00 AM
90
Noon
100
Use the table to answer the following questions.
The marginal, or additional, gain from Raphael’s first hour of work, from 8:00 AM to 9:00 AM, is _____ problems.
The marginal gain from Raphael’s third hour of work, from 10:00 AM to 11:00 AM, is _____ problems.
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What is the total annual cost using the EOQ?
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O Greater than or equal to $900 and less than or equal to $990
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Greater than or equal to $1688 and less than or equal to $1788
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Some rental units have certain expenses included with the
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7. a) Bianca and Sarah rent a semi-detached house. They
pay for utilities as well as rent. Complete the chart to
determine their estimated annual cost for utilities.
Average
Billing
Frequency
Estimated
Amount Billed Annual Cost
Item
Natural gas
Monthly
$118
Electricity
Bi-monthly
$140
Water
Quarterly
$120
Estimated
Total Annual
Cost
b) A news report claimed that utility costs would rise by
an average of 10% next year. Estimate how much
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