MICROECONOMICS (LL) W/CONNECT
21st Edition
ISBN: 9781260583540
Author: McConnell
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 19, Problem 3RQ
To determine
Whether should the firm produce coal or not.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
. 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?…
A software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile devices. The firm estimates that when it comes to labor, MPL = 5 apps per month while PL = $1,000 per month. And when it comes to capital, MPC = 8 apps per month while PC = $1,000 per month. If the company wants to maximize its profits, it should: LO16.5 a. Increase labor while decreasing capital. b. Decrease labor while increasing capital. c. Keep the current amounts of capital and labor just as they are. d. None of the above.
1
Given the following bids to buy and to sell a used book.
Bids to buy: $16. $16 . $18 . $18 . $18 . $20 . $22 $22 . $23 . $24
Bids to sell $18 . $18 . $18 . $22 . $23 . $23 . $23 . $23 . $24 $24
Which argument makes the most sense and why?
A) set price equal to $22 to maximize sales
B) set price at $16, so that more people will buy the product
C) set price at $24 so that more people will sell the product
D) set price at $18 because three people will buy and 3 people will sell
And describe a real life example for what happens to quantity demanded of your product if
A) the price of a complement rises
B) the price of a substitute rises
Knowledge Booster
Similar questions
- 4. Suppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equippedwith a shovel, a machete, and a chainsaw. Clearing one acrebrings in $1,000 in revenue. Each worker’s equipment coststhe worker’s employer $150 per month to rent and each workertoils 40 hours per week for four weeks each month. LO17.6 a. What is the marginal revenue product of hiring one lowskilled worker to clear woodland for one month?b. How much revenue per hour does each worker bring in?c. If the minimum wage were $6.20, would the revenue perhour in part b exceed the minimum wage? If so, by howmuch per hour?d. Now consider the employer’s total costs. These includethe equipment costs as well as a normal profit of $50 peracre. If the firm pays workers the minimum wage of$6.20 per hour, what will the firm’s economic profit orloss be per acre?e. At what value would the minimum wage have to be set sothat the firm would make zero economic profit fromemploying an…arrow_forwardMa2. Required: Question 3.(LO3 Apply) Simon Ltd is run by Simon Leather who makes leather belts for designers. He uses the finest Argentinean leather and needs highly trained machinists to make the belts up to the quality designers expect. His beits usually sell for £50 per item and use 0.2m² of leather and 30 minutes of labor. Simon Ltd has 5 staff. They work a standard 8-hour day, 5 days a week, 48 weeks of the year. They earn £15 per hour. Leather costs £20 per meter. Simon also has some variable overheads of £6 per unit. Fixed overheads are £28,800. a) Calculate the number of belts Simon will have to sell to break even. Simon decides to branch out and start to also sell handbags to the same market. The handbags sell for €250 each and use 1.5m² of leather with 1 hour of labor being required. Variable overheads are £20 per handbag. There has been a bad case of foot and mouth in Argentina. Simon can only use the leather he has currently being shipped to him for the next…arrow_forwardConsider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm’s capacity. If he adds one more worker, the firm’s total monthly revenue will increase from $50,000 to $58,000. If he adds one more tractor, monthly revenue will increase from $50,000 to $62,000. Each additional worker costs $4,000 per month, while an additional tractor would also cost $4,000 per month. LO16.5 a. What is the marginal product of labor? The marginal product of capital? b. What is the ratio of the marginal product of labor to the price of labor (MPL/PL)? What is the ratio of the marginal product of capital to the price of capital (MPK/PK)? c. Is the firm using the least-costly combination of inputs? d. Does adding an additional worker or adding an additional tractor yield a larger increase in total revenue for each dollar spent?arrow_forward
- In the short run, the marginal cost of the first unit of output is $25, the marginal cost of producing producing the third unit of output is $14. The firm's total variable cost of producing three units of O a. $39. O b. $25 O c. $33.. O d. $57.arrow_forwardConsider shopping for cucumbers in a farmers’market. For each statement below, note whichcharacteristic of competitive markets the statement describes. Choose from: standardized good,full information, no transaction costs, and participants are price takers. [LO 3.1]a. All of the farmers have their prices postedprominently in front of their stalls.b. Cucumbers are the same price at each stall.c. There is no difficulty moving aroundbetween stalls as you shop and choosingbetween farmers.d. You and the other customers all seem indifferent about which cucumbers to buy.arrow_forwardQuantity of Gold Bars (in thousands) Extraction Cost (in millions of dollars) User Cost (in millions of dollars) 0 $ 10 $ 5 1 15 5 2 20 5 3 25 5 4 30 5 5 35 5 The table shows the quantity of gold bars in thousands, the extraction cost for each thousand bars (in millions of dollars), and the user cost of each thousand bars (in millions of dollars) facing the OZ Mining Company this year (all costs are marginal). Suppose that a new government regulation is going to shut down OZ's mining operation one year from now. If the current price per bar of gold is $15,000, how many bars (in thousands) should OZ extract and sell this year? Multiple Choice 2 0 1 As many as possiblearrow_forward
- Foster, Inc. makes a new type of rubber gloves for assembly-line workers and will sell them to companies that manufacture electronics products. Foster’s costs for producing a pair of these new rubber gloves is $4.15. Electronics manufacturers pay $6.25 per pair for the currently available rubber gloves for their assembly-line workers. Because Foster’s new rubber gloves allow a better grip, they will enable the workers at the electronics manufacturing companies to assemble 2 percent more products per hour than if they wear the currently available gloves. Assume that each pair of workers’ gloves lasts for 40 hours, and the average pay rate for these workers is $20 per hour. The Foster company would like to estimate the value of a pair of these new rubber gloves to the electronics-manufacturer customer. For R.S. Foster, what is the price floor for a pair of these new rubber gloves? What is the price ceiling? If Foster uses a penetration strategy to price a pair of these new…arrow_forwardFoster, Inc. makes a new type of rubber gloves for assembly-line workers and will sell them to companies that manufacture electronics products. Foster’s costs for producing a pair of these new rubber gloves is $4.15. Electronics manufacturers pay $6.25 per pair for the currently available rubber gloves for their assembly-line workers. Because Foster’s new rubber gloves allow a better grip, they will enable the workers at the electronics manufacturing companies to assemble 2 percent more products per hour than if they wear the currently available gloves. Assume that each pair of workers’ gloves lasts for 40 hours, and the average pay rate for these workers is $20 per hour. The Foster company would like to estimate the value of a pair of these new rubber gloves to the electronics-manufacturer customer. What is the reference value of a pair of Foster’s new rubber gloves? Calculate the differentiation value(s) of a pair of Foster’s new rubber gloves. Calculate the electronics…arrow_forwardConsider that the market demand for a textbook is given by P = 100 - 20 land the market supply is given by P = 10 + Q. Suppose a price ceiling of $20 is imposed. What is the deadweight loss? O 300 O 450 O 600 O 150arrow_forward
- PROBLEMS 1. Workers are compensated by firms with “benefits” in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $20 per hour and in addition received health benefits at the rate of $4 per hour. Also suppose that by 2010 workers at that plant were paid $21 per hour but received $9 in health insurance benefits. LO17.1 By what percentage did total compensation (wages plus benefits) change at this plant from 2000 to 2010? What was the approximate average annual percentage change in total compensation? By what percentage did wages change at this plant from 2000 to 2010? What was the approximate average annual percentage change in wages? If workers value a dollar of health benefits as much as they value a dollar of wages, by what total percentage will they feel that their incomes have risen over this time period? What if they only consider wages when calculating their incomes?…arrow_forwardLet us assume that four plots of land is currently used for agriculture which are denoted as A,B,C and D where A is the most productive land while D is the least productive land (marginal land). Suppose that the profit rate of land D is 10%. a) What the investors of that country are expected to do in that case if the profit rate in industry is 12% according to Ricardo? Will the D continue to be the marginal land in that case? b) What the investors of that country are expected to do in that case if the profit rate of industry is 8%? Do this lead to a change in what will be the marginal land in that case?arrow_forwardIn the United States, labor earnings are about what percent of total income? O a. 75 percent O b. 70 percent O c. 67 percent O d. 50 percent Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning