ECON 1202 Problem sets

Suppose Jill Johnson operates her pizza restaurant in a building she owns in the center of the city. Similar buildings in the neighborhood rent for $4000 per month. Jill is considering selling her building and renting space in the suburbs for $3000 per month, but she decides not to make the move. She reasons: “I would like to have a restaurant in the suburbs, but I pay no rent for my restaurant now, and I don’t want to see my costs rise by $3000 per month.” Evaluate Jill’s reasoning.   What is the difference between a firm’s shutdown point in the short run and in the long run? Why are firms willing to accept losses in the short run but not in the long run?     Number of Workers Mushrooms per Day (pounds) 1 12 2 30 3 45 4 50 5 54 6 56   The table above shows the technology of production at the Matsuko's Mushroom Farm for the month of May. a. What is the marginal product of the 4th worker? What is the average product of labor when the farm hires 5 workers? Diminishing marginal…

Use the graph below to answer parts a to c

Based on Thomas (1971). A toy company produces toys at two plants and sells them in three regions. Each plant can produce up to 4500 units. Each toy sells for $30, and the cost of producing and shipping a toy from a given plant to a region is given in the same file. The company can advertise locally and nationally. Each $1 spent on a local ad raises sales in a region by 0.3 units, whereas each $1 spent advertising nationally increases sales in each region by 0.2 units. a. Determine how the company can maximize its profit. b. If sales stimulated by advertising exhibits diminishing returns, how would you change your model?

provide an economic explanation for the provided text below  While on vacation, you go to a miniature golf course on a weekday and notice no other customers there while you golf. Why do you think a miniature golf course would stay open during the week when it seems like the revenue from so few customers could not possibly cover the costs of running the golf course?  What is an example of another business that stays open even when it's slow, and their revenue does not seem like it could cover their costs?   make sure to use concepts from either of the following topics (minimum of two from the list provided rest may be from own knowledge): externalities, public goods and common resources, understanding costs, business behaviour and businesses in competitive markets.

Suppose that your friend operates a pizza restaurant in the building he owns. Similar buildings in the neighborhood rent for $4,000 per month. He is considering selling the building and renting space in the suburbs for $3,000 a month, but he decides not take the move. He reasons: “ I would like to have a restaurant in the suburbs, but I pay no rent for my restaurant now, I do not want to see my costs rise by $3,000 per month”. What do you think about his reasoning? Is his reasoning correct?

Suppose the imaginary company of Panthera is a small, Cedar Rapids-based American apparel manufacturer specializing in athleisure. The following table presents the brand’s total cost of production at several different quantities.   Fill in the remaining cells of the following table. (Graph is in images)

3.1) Chanelle’s chocolate factory has experienced financial difficulties. As a learned economics student, she has requested your aid to assist her in identifying various linear business functions. You have extracted the following co-ordinates and information for the month of May 2022: Please note that price is the x co-ordinate and quantity is the y co-ordinate. Total cost - A (3000;3) Variable cost – B (3000; 2) Total Revenue – C (12000; 4) Fixed cost = R2500 Using the following co-ordinates Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure

The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner.    Cheeseburger Production Costs Quantity(burgers per hour) Average Variable Cost (dollars) Average Total Cost (dollars) Marginal Cost (dollars) 0 — — — 10 $1.00 $6.60 $1.00 20 0.70 3.50 0.40 30 0.70 2.57 0.70 40 0.78 2.18 1.00 50 0.88 2.00 1.30 60 1.07 2.00 2.00 70 1.34 2.14 3.00 80 1.74 2.44 4.50 90 2.23 2.86 6.20 100 2.81 3.37 8.00   a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is   (Click to select)   falling   rising   at a minimum  and the marginal cost of cheeseburger production is   (Click to select)   falling   rising   at a minimum  .   b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is   (Click to select)   falling   rising   at a minimum  and the average total cost of cheeseburger production is   (Click to select)   falling   rising   at a minimum  .

I want quickly

A new French law is forcing industry giants to donate or recycle unsold goods that they would have otherwise destroyed. Apparel companies, from elite fashion houses to mass-market chains, are saddled with an inventory glut following months long closures during the pandemic. Now, they are trying to get rid of the excess without angering waste-conscious consumers—or harming their brands, reports The Wall Street Journal (Aug. 14. 2020).  (Links to an external site.) In the U.S., brands and retailers locked out of an entire fashion season are flooding charities with unsold products, in addition to sending goods to discount stores and liquidators. Good360, a nonprofit that collects excess merchandise and distributes it to charities, expects more than $660 million in donations for the entire year, double what it received last year. “Brands don’t want their unsold products winding up at flea markets or on Craigslist,” said the CEO of Good360. LVMH—which owns Louis Vuitton, Dior and other…

The blue curve on the following graph represents the demand curve facing a firm that can set its own prices. Use the graph input tool to help you answer the following questions. You will not be scored on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per unit) 100 TOTAL REVENUE (Dollars) 90 80 20 10 0 1250 1125 1000 875 750 625 500 On the previous graph, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 10, 20, 25, 30, 40, or 50 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. 375 250 125 + 0 0 0 Demand 5 10 15 20 25 30 35 40 45 50 QUANTITY (Units) + 5 20 10 15 25 30 35 QUANTITY (Number of units) 40 Graph Input Tool Market for Goods 45 50 Quantity Demanded (Units)…

Assume you are selling season tickets for a team in the National Football League. What are the fixed and variable costs associated with pricing these season tickets? When you look at the existing season ticket prices for the team, how would you sell those same season tickets at a 10 percent higher price?

Economists define profit a bit differently than in accounting. In addition to explicit costs, we also subtract out implicit costs—what you could have earned from the next best alternative.  For example, suppose that you are making $60,000 as an accountant.  You decide to quit your job and open up your own accounting business.  You end up making a profit of $50,000.  How have you done?  Accountants would call this a profit of $50,000 while economists would say that you just lost $10,000 (relative to what you were making before).  So, economists define profits as being equal to total revenues minus total costs, where costs include the opportunity cost. Suppose that a firm had sales revenue of $1 million last year.  It spent $600,000 on labor, $150,000 on capital, and $200,000 on materials.  Calculate the firm’s accounting profit?  If the firm’s factory sits on land owned by the firm that it could rent for $30,000 per year, calculate economic profits.

Suppose the imaginary company of Athena is a small, Raleigh-based American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost (Pairs) (Dollars) (Dollars) COSTS (Dollars per pair) 200 175 150 125 On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $160, so you should start your ATC curve by placing a green point at (1, 160). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $100, so you…

We have the results from our first Facebook ad campaign. The following table summarizes the results broken down by age and whether the person seeing the add clicked through. Age 40 or under 85 Age more than 40 65 Total Clicked Through 150 Did Not Click 590 260 850 Total 675 325 1000 For our up(combing) (pun intended) campaign, I want to make it as effective as possible, a cut above all other ad campaigns! I'm thinking that since 85 (or 56.7%) of the 150 people who clicked through to our website are age 40 or less, we should focus our ads to only younger people. I'm not great with number though, and since I know you had a stats class in college, I wanted to get your opinion. Should we focus our adds only to those age 40 and under or should we do something else?

After viewing the film Back to the Future, Matt takes a nap but has a disturbing dream. He sees himself 50 years into the future, and his town has become a large city. Dozens of computer businesses exist in the city. However, he is still selling only 1200 computers a year at his store. He observes that computer prices are now $900 and his ATC is still $1000. His AVC is $750 and his AFC is $250. In a panic, Matt closes his store immediately rather than continue to lose money. Did he do the right thing? Why, or why not? Illustrate numerically to support your answer. In desperation, Matt considers raising his price back to the $1,300 that he charged in the “good old days.” Without any more information than the fact that computers now sell in a perfectly competitive market, can you tell Matt what the outcome of his price change will be? Perplexed about whether his proposed action is the right approach and uncertain about your advice, Matt calls in a consultant who tells him that he…

Your uncle is thinking about to open a fish & chips restaurant. He estimated that it would cost $300,000 per year to rent the location, $45,000 to buy the stock and $60,000 to purchase equipment. In addition, he would have to quit his $85,000 per year job as an accountant. How much is his explicit cost, implicit cost, and briefly explain the difference between Accounting profit and Economic profit with examples?

Note: You need to show all your calculations within the table. Q1. Pizzas sell for $13 each. Pat’s cost of producing pizzas is given below. Complete the table: Output (pizzas per hour) Total Cost (dollars per hour) Fixed Cost (1) Variable Cost (2) Average Cost (3) Average Fixed Cost (4) Average Variable Cost (5) Marginal Cost (6) Total Revenue (7) Marginal Revenue (8)   0 10                 1 21                 2 30                 3 41                 4 54                 5 69                   Write down the formulas for all the calculations in the table above, from columns 1 – 8:

Until recently, Mark worked as a financial advisor, earning $65,000 annually. Then he inherited a piece of commercial real estate that had been renting for $14,000 annually. Mark decided to leave his job and operate a sea food restaurant in the space he inherited. At the end of the first year, his books showed total revenues of $300,000, and paid a total cost of $200,000 for food, utilities, cooks, and other supplies: Show all your work including formulas learned to support your answer for each of the following:    A) Calculate his explicit costs:    B) Calculate his implicit costs.    C) Calculate his accounting profits.    D) Calculate his economic profits.

Suppose the imaginary company of Roobek is a small, Reno-based American apparel manufacturer specializing in athleisure. The following table presents the brand’s total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost Fixed Cost Variable Cost Average Variable Cost Average Total Cost   (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair)   0 60       — —     1 160             2 220             3 270             4 340             5 450             6 630             On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC…

11. You are the manager of a midsized company that assembles personal computers. You purchase most components-such as random access memory (RAM)-in a competitive market. Based on your marketing research, consumers earning over $80,000 purchase 1.5 times more RAM than consumers with lower incomes. One morning, you pick up a copy of The Wall Street Journal and read an article indicating that input components for RAM are expected to rise in price, forcing manufacturers to produce RAM at a higher unit cost. Based on this information, what can you expect to happen to the price you pay for random access memory? Would your answer change if, in addition to this change in RAM input prices, the article indicated that consumer incomes are expected to fall over the next two years as the economy dips into recession? Explain. (LO1, LO3, L05) 12. You are the manager of a firm that no d

Webby Inc. is a web development company. Webby's monthly production function for developing websites is given in the table below. Webby pays $3,000 a month in rent for office space and equipment. It pays each programmer $2,000 a month. There are no other production costs. Fill in the table of production costs. Instructions: Round your answers to the nearest dollar. Programmers Websites 0 1 2 3 4 5 6 0 2 6 12 18 22 24 Variable Cost 2,500 1,167 750 Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost

2.9 [Related to the Apply the Concept: "Fixed Costs in the Publishing Industry" O] A Federal Reserve publication notes “Airlines have high fixed costs." What are likely to be the most important fixed costs for an airline? Are airlines likely to have particularly high fixed costs relative to their variable costs compared with, say, an Old Navy clothing store or a Panera Bread restaurant? Briefly explain.

Douglas Fur is a small manufacturer of fake-fur boots in Dallas. The following table shows the company’s total cost of production at various production quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost Fixed Cost Variable Cost Average Variable Cost Average Total Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 0 120       — —   1 210           2 270           3 315           4 380           5 475           6 630

6 In 1916, Henry Ford was quoted as saying the following:                               "There are men who will pay $360 for a car who would not pay $440.  We had in round numbers    500,000 buyers of cars on the $440 basis, and I figure that on the $360 basis we can    increase sales to possibly 800,000 cars for the year - less profit on each car, but more cars,    more employment of labor, and in the end we get all the total profit we ought to make."                         If Ford's estimate as correct, what was the price elasticity of demand for his cars?   By how much did total revenue increase?                                                       7 Using the data from question 6, above, write the demand curve equation for Henry Ford's    cars.                                                               8 Using the demand curve equation from question 7, build a graphic to sell Ford cars to the    public in 1916.

Jane's Juice Bar has the following cost schedules: In the following table, complete the marginal cost, average variable cost, and average total cost columns. Quantity Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost (Vats of juice) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 0 0 30         1 5 35       2 15 45       3 30 60       4 50 80       5 75 105       6 105 135         On the following graph, use the orange points (square symbol) to plot the marginal-cost curve for Jane's Juice Bar. (Note: Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing production from 1 vat of juice to 2 vats of juice is $5, then you would plot a point at (1.5, 5).) Then use the purple points (diamond symbol) to plot the average-variable cost curve starting at 1 vat of juice, and use the green points…

According to W. Gillepse, "A minimum of expenses is of course, highly desirable; but the road which is truly the cheapest is not the one which has cost the least money, but the one which makes the most profitable returns in proportion to the amount expended upon it." Explain the quote based on his economic views.