EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 16, Problem 1P
To determine
Maximum rent paid by the farmer.
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Monique has a flock of six chickens in her backyard that she initially bought for $6 each. Theflock currently lays 20 eggs per week, which Monique and her family consume at home, andher current cost of feed is $2 per week. Monique has a job that pays $8/hour with flexiblehours, but she is thinking of selling her chickens’ eggs to earn extra income. To start sellingeggs, she would need to increase production to 30 eggs per week. She can do this by increasingthe chickens’ feed to $3 per week and taking an hour off work each week to devote to chickenrearing. If the market price of her farm-fresh eggs is $1 per egg, what would be Monique’sweekly economic profits from selling her chickens’ eggs? (Select one from below)
(a) −$9: This is her revenue minus her accounting cost.(b) −$1: This is her revenue minus her production cost.(c) $0: Eggs are a constant-cost market so producers must earn 0 profits.(d) $1: This is her revenue minus her economic cost.(e) $7: This is her revenue minus her…
Suppose that you operate a business that produces widgets. What's a widget?
A widget is a hypothetical product with no particular attributes or features to
confuse us. Just widgets.
In the course of a month, you produce 5,000 widgets.
You only have three inputs when producing widgets; 1) factory space; 2) labor;
and 3) raw materials.
You pay rent of $4,000 per month.
Your use of labor and raw materials depends on how many widgets you
produce. When you produce 5,000 widgets, your labor costs are $5,000 and
your raw material costs are $1,500. A
What is your average fixed cost of producing 5,000 widgets?
(Enter your answer without a dollars sign ($) in the following form:
dollars and cents)
(i.e.,
Suppose that you own a 10 acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per care for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. Now suppose the price at which wheat cab be sold is $7 per bushel and that farmers want to earn a normal profit of $10 per acre.
What is the most that any farmer would pay to rent your 10 acres?
What if the price of wheat rose to $8 per bushel?
Chapter 16 Solutions
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