EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 3RQ
To determine
Whether should the firm produce coal or not.
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Chapter 17 Solutions
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- Suppose that marginal product doubled while product price tripled in the table belo Marginal Marginal Product (MP) Units of Total Product Product Price | Total Revenue Revenue Resource (Output) Product $2 $0 1 7 7 2 14 $14 2 13 6. 2 26 12 3 18 2 36 10 4 22 2 44 8 25 50 6 27 2 2 54 4 7 28 1 56 LOarrow_forwardQuestion 1 The Profit Maximizing Production Level for this firm at the given market price will be: O 45 O 15 O 60arrow_forward8. Why can the distinction between fixed costs and variable costs be made in the short run? Classify the following as fixed or variable costs: advertising expenditures, fuel, interest on company-issued bonds, shipping charges, payments for raw materials, real estate taxes, executive salaries, insurance premiums, wage payments, sales taxes, and rental payments on leased office machinery. LO4arrow_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_forwardLet's assume that a firm produces 60 products. Its total weekly cost (TC) at this output is $2,100. This includes TVC and TFC. We also know that the firm employs 3 part- time workers at a wage cost of $600 per worker per week. This is the firm's only variable cost (TVC). What is the firm's average fixed cost (AFC) at this output? O $2.50. O $2. O $5. O $100. O $10. Let's assume that a firm's total weekly costs are as follows: 1. Salaries of hired workers $5,000. 2. Supplies = $1,000. 3. Rent = $600, 4. The owners have invested a certain amount of their own money into the business. This could have earned them interest of $200 per week if they had chosen to put it into a bank instead of investing it into their business. 5. The value of the owner's time is estimated to be $800 per week. What are the firm's total economic costs? O $6.000 O $7.600. O $900. $7.500. O $6.700.arrow_forwardMC ATC AVC MARKET PRICE AFC 15 P.arrow_forward
- What is the Average Total Cost (ATC) for producing 84 units of output? Quantity of Labor 5 7.4 7 7.62 0 1 2 3 4 сл 5 LO 6 Total Output 0 16 40 60 72 80 84 Fixed Cost $160 Variable Cost $80 $160 $240 $320 $400 $480 Total Costarrow_forwardAnswer the question on the basis of the following cost data. Output Total Fixed Cost Total Variable Cost Average Fixed Cost Average Variable Cost 1 $ 50.00 $ 2 $ 50.00 $ 3 $ 50.00 $ 4 $ 50.00 $ 5 $ 50.00 $ 6 $ 50.00 $ 440.00 $ 7 $ 50.00 $ 560.00 $ 8 $ 50.00 $ 700.00 $ The marginal cost of the fifth unit of output is O 62 O 80 O 78 O 3 100.00 $ 160.00 $ 200.00 $ 260.00 $ 340.00 $ 50.00 $ 25.00 $ 16.67 $ 12.50 $ 10.00 $ 8.33 $ 7.14 $ 6.25 $ 100.00 80.00 66.67 65.00 68.00 73.33 80.00 87.50arrow_forwardEmployment 0 1 2 3 4 5 6 Labor Demand Data Total Product 0 15 28 о Multiple Choice о O $18 $17 39 48 55 60 $15 $16 Product Price $2.20 2.00 1.80 1.60 1.40 1. 20 1.00 The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing wage rate? Labor Supply Data Employment 0 1 2 3 4 LO 5 6 Wage Rate $15.00 16.00 17.00 18.00 19.00 20.00arrow_forward
- Suppose 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_forwardYou are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. Your economic profit last year was O $50,000 O $60,000 O $10,000 O $30,000arrow_forwardTable) Based on the table, what is the average total product when John's Salsa Company hires three people? Total 1741 4 KIL I O 33 O 13 O 11 Farmer Jean sells corn in a perfectly competitive market. The market price for a bushel of corn is $6. Jean has six hundred bushels of corn to sell. If her total variable cost is $3,300 and her total fixed cost is $300, then: 000 Jean should raise her price. Jean is earning a positive economic profit. Jean is minimizing her losses. Jean is earning a normal profil.arrow_forward
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