Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 11, Problem 5QAP
To determine
Determine how does ‘just-in-time’ approach changes the mix of fixed and variable costs.
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The following is cost information for the Creamy Crisp Donut Company Entrepreneur's potential earnings as a salaried worker - $60.000
Annual lease on building = $30,000
Annual revenue from operations = $250,000
Payments to workers = $100,000
Utilities (electricity, water disposal) costs = $8,000
Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000
Entrepreneur's forgone interest on personal funds used to finance the business = $6,000
If, other things equal, Creamy Crisp's revenue rose to $284.000
A. its implicit costs would exceed its economic costs
B.it would earn a normal profit but not an economic profit
C. it would suffer an economic loss
D. it's accounting profit would fall to $0
In 2009 General Motors (GM) announced that it would reduce employment by 21,000 workers. What does this decision reveal about how GM viewed its marginal revenue product (MRP) and marginal resource cost (MRC)? Why didn’t GM reduce employment by more than 21,000 workers? By fewer than 21,000 workers?
* The marginal product of a factor shows how much an additional unit of a factor adds to
unit costs:
- the level of production.
- profitability.
- dollar revenue.
* The marginal revenue product of a factor shows how much an additional unit of a factor adds to
the level of production:
- dollar revenue.
- profitability.
- unit costs.
* A profit‑maximizing firm operating in a perfectly competitive market will add new units of a factor of production until:
- marginal revenue product equals factor price.
- marginal product equals factor price.
- marginal revenue product equals marginal product.
- marginal revenue product equals marginal revenue.
Chapter 11 Solutions
Microeconomics
Ch. 11.1 - Prob. 1QCh. 11.1 - Prob. 2QCh. 11.1 - Prob. 3QCh. 11.1 - Prob. 4QCh. 11.1 - Prob. 5QCh. 11.1 - Prob. 6QCh. 11.1 - Prob. 7QCh. 11.1 - Prob. 8QCh. 11.1 - Prob. 9QCh. 11.1 - Prob. 10Q
Ch. 11 - Prob. 1QECh. 11 - Prob. 2QECh. 11 - Prob. 3QECh. 11 - Prob. 4QECh. 11 - Prob. 5QECh. 11 - Prob. 6QECh. 11 - Prob. 7QECh. 11 - Prob. 8QECh. 11 - Prob. 9QECh. 11 - Prob. 10QECh. 11 - Prob. 11QECh. 11 - Prob. 12QECh. 11 - Prob. 13QECh. 11 - Prob. 14QECh. 11 - Prob. 15QECh. 11 - Prob. 16QECh. 11 - Prob. 17QECh. 11 - Prob. 18QECh. 11 - Prob. 19QECh. 11 - Prob. 1QAPCh. 11 - Prob. 2QAPCh. 11 - Prob. 3QAPCh. 11 - Prob. 4QAPCh. 11 - Prob. 5QAPCh. 11 - Prob. 1IPCh. 11 - Prob. 2IPCh. 11 - Prob. 3IPCh. 11 - Prob. 4IPCh. 11 - Prob. 5IP
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