Professor D. Rawana
Ann Marie Webb
Week 1 Assignment
Chapter 1 – The fundamental of Managerial Economics
Q 1 pare 27
Southwest Airlines begins a "Bags Fly Free" campaign, charging no fees for a first and second checked bag. Does this situation best represent?
a) Producer-producer rivalry?
b) Consumer-consumer rivalry?
c) Producer-consumer rivalry?
Explain your choice.
Answer – A
Southwest Airlines of charging no fees for a first and second checked bag resulted from producer-producer rivalry. In this situation there are fewer customers but there are a numbers of airlines.
Therefore given that customer are scarce, Southwest Airlines are competing with other companies within the airline industries in…show more content… What are her economic profits?
Economic profits are the difference between total revenue and total opportunity cost.
Opportunity cost comprised of the explicit cost of the resource plus and the implicit cost of giving up its best alternative use.
In the question the: Total revenue (25painters @ price $8,000) = $200,000 Explicit Costs = ($30,000) The best alternative cost foregone to continue being a painter Implicit Costs = ($110,000) Opportunity costs = ($140,000) Economic profits $60,000
Q 21 page 32 Brazil points to its shrimp-farming industry as an example of how it can export shrimp in the world market. One decade ago, Brazil exported a meager 400 tons of shrimp. Today, Brazil exports more than 58,000 tons of shrimp, with approximately one-third of that going to the United States. Brazilian shrimp farmers however, potentially face a new challenge in the upcoming years. The Southern Shrimp Alliance- a U.S. organization representing shrimps-producing countries is selling shrimp below "fair market value." The organization is calling for the United States to impose a