Concept explainers
Sub Part (a):
The decision-making process related to power plant.
Sub Part (a):
Explanation of Solution
The total cost of catching 30 tons of fish by ‘ER’ can be calculated as follows:
To catch 30 tons, the cost for ‘ER’ is $6,000.
The total cost of catching 30 ton fish by ‘KY’ can be calculated as follows:
To catch 30 tons, the cost for ‘KY’ is $66,000.
Since the total cost of fishing for ‘KY’ is less than the other person, ‘KY’ should catch the entire fist.
The average cost can be calculated as follows:
The average cost is $2,200 per ton.
Concept introduction:
Decision-making process: The decision-making process refers to the process of finalizing the choice between the available alternatives through collecting respective information and assessing it.
Sub Part (b):
The decision-making process related to power plant.
Sub Part (b):
Explanation of Solution
The first five ton cost of fishing for ‘ER’ is less than the ‘KY’. The additional ton cost for ‘ER’ is greater than the additional cost of ‘KY’. Thus, first 5 tons should be caught by ‘ER’ and the remaining fish should be caught by ‘KY’. The total cost for this combination can be calculated as follows:
The total cost is $64,000.
The average cost can be calculated as follows.
The average cost is $2,133.33 per ton.
Concept introduction:
Decision-making process: The decision-making process refers to the process of finalizing the choice between the available alternatives through collecting respective information and assessing it.
Sub Part (c):
The ER's profit.
Sub Part (c):
Explanation of Solution
ER’s total profit can be calculated as follows.
ER’s total profit is $22,500. ER’s total profit after selling 25 tons can be calculated as follows.
ER’s total profit after selling the ITQ is $23,750.
Sub part (d):
Who would be willing to offer $500 for additional 25 tons.
Sub part (d):
Explanation of Solution
The person ER can earn $500
Want to see more full solutions like this?
- Suppose, under license from Apple, a factory in China buys all the components for an iPhone from multiple manufacturers for $150 They assemble the iPhone and sell it to Apple for $350. Apple then sells the phone to customers for $699. How much value does Apple add during their step in the production process? Ⓒ$1.50 1200 O $349 O $350arrow_forwardThe graph below shows the market for oats. Price per bushel 10 9 8 7 6 LO 5 4 3 2 1 0 15 45 30 75 105 135 120 150 60 90 Quantity per period (in millions of bushels) D Tools S₂ (i)arrow_forwardQuestion 4 of 18 > A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 6 bushels of beans, then her opportunity cost of 1 bushel of beans is 0.38 bushels of corn. O 16.00 bushels of corn. O 2.67 bushels of corn. O 2.99 bushels of corn.arrow_forward
- What will be the average cost per ton for the 30 tons? Instructions: Round your answer to 2 decimal places. $ c. Suppose that Eric and Kyle can both sell whatever amount of fish they catch for $3,000 per ton. Also suppose that Eric is initially given ITQS (individual transferable quotas) for 30 tons of fish, while Kyle is given ITQS for zero tons of fish. Suppose that Kyle is willing to pay Eric $550 per ton for as many tons of ITQS as Eric is willing to sell to Kyle. How much profit would Eric make if he used all the ITQS himself? What is the profit situation if Eric sold 25 tons' worth of his ITQS to Kyle while using the other 5 tons of ITQS to fish for himself? d. What price per ton can Kyle offer to pay Eric for his 25 tons of ITQS such that Eric will make exactly as much money from that deal (in which he sells 25 tons' worth of ITQS to Kyle while using the rest to fish for himself) as he would by using all 30 tons of ITQS for himself? per ton of ITQSarrow_forward2 B agriculture Here's a production possibility frontier graph. In this example.... At point E, approximately what is the cost of another unit of industry? O6 units of agriculture O 4 units of agriculture 9 10 11 O2 units of agriculture O 1 unit of agriculture O 0 units of agriculturearrow_forwardWith current technology, suppose a fifirm 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 fifirm can sell these 400 loaves at $2 per unit, will it continue to produce banana bread? If this fifirm’s situation is typical for the other makers of banana bread, will resources flow to or away from this bakery good?arrow_forward
- 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 acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. If the price at which wheat can be sold is $5 per bushel and if 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 $6 per bushel?arrow_forwardIf you help answer quickly and correctly I will give a thumbs up! Thank you! :)arrow_forwardQUESTION 6 product Y O 28 24 20 16 12 8 0 b) 4/5 c) 5/4 O d) -4/5 O 4 none of the above Production Possibilities Frontier point A 8 -point F 12 product X point B -point C 16 20 -point E 06. What is the per-unit opportunity cost of product Y as production moves from point D to point A? O a) -5/4 point D 24arrow_forward
- hello i need an answer in 10minutes thankssarrow_forwardA farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 4 bushels of beans, then her opportunity cost of 1 bushel of beans is 0.25 bushels of corn. 16.00 bushels of corn. 4 bushels of corn. O 2.99 bushels of corn.arrow_forwardPlease show all your math work so I can follow along. Thank you for your help.arrow_forward