EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 16, Problem 6RQ
To determine
Characteristics of an entrepreneur.
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Suppose that a business incurred implicit costs of $250,000 and explicit costs of
$500,000 in a specific year. If the firm sold 10,000 units of its output at $80 per unit, it's
economic profit is
O 150,000
O 100,000
300,000
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115
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1200
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If a firm X achieves productivity efficiency, what will be the total revenuel
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At what price will a firm stop operating? Please explain.
If the market price is RM4.00, what is the total profit or total loss.
Chapter 16 Solutions
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- acroeconómic Policy and Natural Resources (10)|| Sp Time left 1:23:57 estion When a par ar firm is fully utilizing its capital, its output is given by Y = 10 × LO5. The cost of labour is OMR1 per unit. To maximize profit, how many units of labour should this firm use? wer saved -ked out of Flag O a. 50 estion O b. 100 О с. 5 O d. 25 O e. 3.16 CLEAR MY CHOICE NEXT PAGE PREVIOUS PAGE CET 0001 A 人 hparrow_forwardConsider the case of a manufacturing company which produces and sells brand pens. The selling price is $20 per pen, the total fixed operating cost is $2 million, and the variable cost per unit is $10, the total fixed financing cost is $500,000. How many pens should the company sells so it would neither make a profit or loss? O a. 4,000,000 O b. 20,000,000 O c. 200,000 O d. 25,000 O e. 2,500,000arrow_forwardSuppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equipped with a shovel, a machete, and a chainsaw. Clearing one acre brings in $1,000 in revenue. Each worker’s equipment costs the worker’s employer $150 per month to rent and each worker toils 40 hours per week for four weeks each month. LO17.6 Now consider the employer’s total costs. These include the equipment costs as well as a normal profit of $50 per acre. If the firm pays workers the minimum wage of $6.20 per hour, what will the firm’s economic profit or loss be per acre? At what value would the minimum wage have to be set so that the firm would make zero economic profit from employing an additional low-skilled worker to clear woodland?arrow_forward
- Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients, the bottles, and the labels was $700. In addition, it took her 20 hours to make the ketchup and to do so she took time off from a job that paid her $20 per hour. Linda’s accounting profit is while her economic profit is. LO9.1 a. $700; $400 b. $300; $100 c. $300; negative $100 d. $1,000; negative $1,100arrow_forwardQuantitative le 28 A small company makes only two products with the following production constraints representing two machines and their maximum availability: 2X +3Y < 18 2X + Y X 2 0; Y 20 If: X = units of the first product. Y = units of the second product. < 10 If the profit equation is Z P4X + P2Y, the maximum possible profit is P20. a. P21. b. P18. с. d. P24. (CMA, Adapted) 39. Variables that are important to the decision-making process but are out of the control of the decision maker, e.g., economic conditions, are considered to be exogenous variables. b. a. decision variables. performance criteria. d. с. constraints. (CMA, Adapted) 40. A large retail chain has 10 warehouses and 50 retail locations. The quantitative technique it would likely use to determine the minimum cost of moving its goods from the warehouses to the retail stores is a transportation model. b. a. Markov analysis. calculus-based optimization. d. с. a queuing model. 41. A transportation model is a special case…arrow_forward2. Profit maximization A profit-maximizing firm will use less of a factor of production when: The extra cost of using an additional factor unit is greater than the marginal revenue product of the additional factor unit. O The marginal physical product of the additional factor unit is greater than the marginal revenue product (MRP) of the additional factor unit. O The marginal physical product of the additional factor unit is less than the marginal revenue product of the additional factor unit. O The extra cost of using an additional factor unit is greater than the marginal physical product (MPP) of the additional factor unit. Apply your answer as an argument to the labor market-when the wage rate is below the MRP, the firm should hire workers. Therefore, what is the relationship between a perfectly competitive firm's MRP curve for an input and that firm's demand curve for that input? O The firm's demand curve for an input is the downward-sloping portion of the MRP curve. O They are…arrow_forward
- . Suppose that a car dealership wishes to see if efficiency wages will help improve its salespeople’s productivity. Currently, each salesperson sells an average of one car per day while being paid $20 per hour for an eight-hour day. LO17.8 What is the current labor cost per car sold? Suppose that when the dealer raises the price of labor to $30 per hour the average number of cars sold by a salesperson increases to two per day. What is now the labor cost per car sold? By how much is it higher or lower than it was before? Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased? Suppose that if the wage is raised a second time to $40 per hour the number of cars sold rises to an average of 2.5 per day. What is now the labor cost per car sold? If the firm’s goal is to maximize the efficiency of its labor expenditures, which of the three hourly salary rates should it use: $20 per hour, $30 per hour, or $40 per hour?…arrow_forwardNumber of Employees Total Production Marginal Product of Labor Marginal Revenue Product O 1 2 3 4 O Four employees O One employees O Three employees O OTwo employees 9 24 36 43 O 9 If the price of the item is $15.00 per unit and the employees cost $125 each, how many employees should the firm hire to maximize their profit? 15 12 7arrow_forward4. Various measures of cost Suppose the imaginary company of Roobek is a small, Jackson-based American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost (Pairs) (Dollars) (Dollars) 0 1 2 3 4 LO 5 6 120 200 240 285 340 425 540 Fixed Cost Variable Cost (Dollars) (Dollars) Average Variable Cost (Dollars per pair) Average Total Cost (Dollars per pair)arrow_forward
- O O 971 5:39 Total Cost Output (Units) ($) 50 10 120 20 170 30 210 40 260 50 330 60 430 Total costs include a "normal" return on the time (labor services) and capital that the owner has invested in the firm. The prevailing market price is $7 per unit. (a) Prepare (i) marginal cost and (ii) average total cost schedules for the firm. (b) What is the firm's profit maximizing output level? Is the industry in long-run equilibrium? Justify your answer.arrow_forwardLAST WORD Suppose that minimum efficient scale for producing items with a 3-D printer is 100 times what a typical family would consume in a year Would you expect each family to have its own 3-D printer? What sort of industry structure might arise?arrow_forwardA firm's production is as follows: Q = 12K2L/3, where L is number of workers and K is number of machines. The firm spent $100,000 for the 81 machines it owns. The selling price of the output is $300, and each worker can be hired for $48. What is the firm's maximum total profit? O $372,000 O $422,000 O $224,000 O $148,000arrow_forward
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