Engineering Economy
16th Edition
ISBN: 9780133582819
Author: Sullivan
Publisher: DGTL BNCOM
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Chapter 2, Problem 44P
To determine
The given statements are true or false.
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Q)Distinguish between explicit and implicit costs, giving examples of each.
(a) What are the explicit and implicit costs, say for example for joining university study?
(b) Why does the economist classify normal profits as a cost?
(c) Are economic profits a cost of production?
Long-run average cost (AC) of operation may decrease for three reasons.a. List and explain the three reasons why the average unit cost may decrease in the auto industry or any other industry over time.
b. Give an example of the learning curve for a business operation where the average costs were reduced due to cumulative production experience.
c. Suppose that the global learning curve for solar power installation in the US is at 93% according to a recent study. interpret what this learning rate implies.
d. How might the learning curve information help businesses in making operational decisions?
Chapter 2 Solutions
Engineering Economy
Ch. 2 - An experimental composite engine block for an...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6PCh. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10P
Ch. 2 - Prob. 11PCh. 2 - Prob. 12PCh. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - Prob. 17PCh. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - An automobile dealership offers to fill the four...Ch. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 36PCh. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Prob. 41PCh. 2 - Prob. 42PCh. 2 - Prob. 43PCh. 2 - Prob. 44PCh. 2 - A hot water leak in one of the faucets of your...Ch. 2 - Prob. 46PCh. 2 - Prob. 47PCh. 2 - Prob. 48SECh. 2 - Prob. 49SECh. 2 - Prob. 50CSCh. 2 - Prob. 51CSCh. 2 - What is the optimal number of units that should be...Ch. 2 - Prob. 53FECh. 2 - Prob. 54FECh. 2 - Prob. 55FECh. 2 - Prob. 56FECh. 2 - Prob. 57FECh. 2 - Prob. 58FE
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Similar questions
- What are explicit and implicit costs?arrow_forwardWhich of the following best defines a sunk cost? A. Costs that have already been incurred and cannot be recovered. B. The variable costs associated with increasing production. C. The total costs including both fixed and variable costs. D. Future costs that are expected to be incurred as a result of current decisions.arrow_forwardQUESTION 4 a. Explain any two process technologies for materials. b. Discuss any three factors that will help to determine the type of production process used. c. Distinguish between design capacity and effective capacity. Provide a brief example. d. Why is the capacity decision important? e. A regional bank training center has the physical ability to handle 1,300 participants. However, management personnel believe that only 1,100 participants can be handled effectively for most training sessions. The last training session, although forecasted to have 1,000 participants, resulted in the attendance of only 990 participants. Calculate the utilization and efficiency of the training facility.arrow_forward
- What happen to salaries and wages when you are in a production/manufacturing business that you want to operate on and on for many production cycles? a. it will either be a variable and/ or fix cost b. it becomes fixed cost c. It becomes variable cost d. it is an operating expense When there are 3 indifference curves in a graph, what ideal point is desired? a. a point where budget and satisfaction coincides with each other b. a point that is within the highest budget line c. point that is within the highest indifference curve d. the point where there is satisfaction yielded An example of business that is servicing a captive consumers as there is an absence of choices to serve them. a. Duopoly b. Monopsony c. Monopoly d. Oligopolyarrow_forwardpart C Darrow_forwardQUESTION 2 a. Himaya resigned as an architect with a monthly salary of RM5000. He used his savings of RM120000 to start a restaurant in Kuching, Sarawak. The following information shows his estimated monthly expenses. Workers' salary RM2200 Electricity and water bill RM2500 Shop rent RM3000 Raw material RM6000 If saving interest is 5% a year, calculate the following cost in a month. i. Explicit cost ii. Implicit costarrow_forward
- Distinguish between explicit and implicit costs, giving examples of each. What are some explicit and implicit costs of attending college?arrow_forwardReq soonnarrow_forwardCapacity Utilization Rate is: A. The total amount of plant and equipment that is actually being used at any given time B. The percent of plant and equipment that is actually being used at any given time C. The percent of stocks and bonds that is actually being used at any given time D. The percent of inventory and residential housing that is actually being used at any given timearrow_forward
- QUESTION 1: Calculate a plant's total cost for every day in the data, in dollars. Total cost is defined as: total_cost = total_raw_materials_cost + total_operating_cost + total_labor_cost. Which plant is the most expensive to operate, and what is the cost to operate the plant? QUESTION 2: Which cost source (or combination of sources) makes up the majority of a plants total expenditures? raw material, labor, operating, or no cost is consistently the majority of total cost across plants QUESTION 3: Calculate cost efficiency, defined as how much money is spent to produce 1 pound of release ease (i.e. total production/cost). Which plant is the least cost efficient, in lbs of release ease produced per dollar spent? What is the daily average efficiency for the plant that is most efficient? link to excel data:https://docs.google.com/spreadsheets/d/1PM9rh2DnEdKQqCjJM1cmVjcP7_YSdA0y/edit?usp=sharing&ouid=109691244462343090665&rtpof=true&sd=truearrow_forwardMatch the terms in the first column with the appropriate definition in the second column.arrow_forwardWhen thinking about cost analysis in Microeconomics, what are the real-world problems that occur when applying theories of scale? Describe and give an example of each.arrow_forward
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