Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 15, Problem 11DQ
To determine
Why companies spend less on R&D towards basic scientific research.
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A life-insurance salesman spends 12 hours a week on the telephone soliciting new clients. From past experience, the salesman estimates that
each hour spent calling students, blue-collar workers, and professionals will produce the following number of additional sales:
Hours
Calling
0
1
2
3
4
LO
5
6
Number of Additional Sales
Blue-Collar
Workers
0
19
17
15
14
12
11
Students
0
25
22
19
17
15
12
Professionals
0
21
19
17
15
12
11
How should the life-insurance salesman allocate his phone-calling time to maximize the number of sales?
Hours spent calling students =
Hours spent calling blue-collar workers =
Hours spent calling professionals
With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the firm can sell these 400 loaves at $2 per unit, what is its total revenue? Its total cost? Its profit or loss? Will it continue to produce banana bread? If this firm’s situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?
2014
Tennis balls
Golf balls
Bottles of Gatorade
Price
$2
$4
$1
Quantity
100
100
200
2015
Price
Quantity
Tennis balls
Golf balls
Bottles of Gatorade
$6
100
$2
$2
100
200
Chapter 15 Solutions
Economics (Irwin Economics)
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