EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 2, Problem 7DQ
To determine
The product variation and profit maximization.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
With current technology, suppose a firm is producing 400 loaves of banana bread dally. Also assume that the least-cost combination of
resources for producing those loaves is 10 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at
prices of $20, $60, $60, and $20, respectively. Assume the firm can sell these 400 loaves at $2 per unit.
Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in
front of those numbers.
What is the firm's total revenue?
What is its total cost?
Calculate the amount of economic profit or loss.
will R continue to produce banana bread?
IClen to select
If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?
IClick to selectt
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate.
Hours Needed Amount Produced
To Make 1
in 40 Hours
mixer toaster
8 5
10
mixers
5
2
toasters
8
4
Maya
Miguel ?
Maya should specialize in the production of
O a. mixers and Miguel should specialize in the production of toasters.
O b. toasters and Miguel should specialize in the production of mixers.
O c. neither good and Miguel should specialize in the production of both goods.
O d. both goods and Miguel should specialize in the production of neither good.
With current technology, suppose a firm 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. Assume the firm can sell these 400 loaves at $ 2 per unit.
1). What is its total revenue?
2). What is its total cost?
3). What is the firm's profit or loss? The firm generates an economic ( choose one -a) loss, b) profit ) of...?
4). Will it continue to produce banana bread? ( Yes or No)
5). If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?
Chapter 2 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
Ch. 2.2 - Prob. 1QQCh. 2.2 - Prob. 2QQCh. 2.2 - Prob. 3QQCh. 2.2 - Prob. 4QQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQ
Ch. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- With current technology, suppose a firm 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 firm can sell these 400 loaves at $2 per unit, what is its total revenue? Its total cost? Its profit or loss? Will it continue to produce banana bread? If this firm’s situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?arrow_forwardSuppose that Samsung’s production costs are the same in both China and India. Also suppose that Samsung can produce cell phones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones. If customers in India demand 100 million phones and customers in China demand 200 million phones, Samsung’s lowest-cost option is to A. produce 150 million phones in India for Indian demand and 50 million to export to China and produce 150 million phones in China for Chinese demand. B. produce 100 million phones in India for Indian demand and produce 200 million phones in China for Chinese demand. C. produce phones only in India and export phones to China. D. produce phones only in China and export phones to India.arrow_forwardUsing the following table with the resources and their cost per unit, which production choice would a business decide to use? $100 $30 $20 Cost per unit Capital Labor Land Production 2 1 2 choice 1 Production 1 5 2 choice 2 Production 2 4 3 choice 3 Production choice 2 Production choice 3 Production choice 1 LOarrow_forward
- 1. Rio live in a town with 300 adults and 200 children, and he is thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000 except all cost like maintenance costs until two years, but selling an extra ticket has zero marginal cost. Here are the demand schedules for his two types of customer: Price Adults Children $10 9 100 8 200 7 300 6 300 300 100 4 300 200 300 200 300 200 1 300 200 300 200 a. To maximize profit, what price would he charge for an adult ticket? For a child's ticket? How much the profit? (Hint: total cost for this year include fixed cost) b. Suppose in this year, the city council passes a law prohibiting him from charging different prices to different customers. What price does he set for a ticket now? How much profit now? (Hint: when quantity of produced yield maximum revenue or the sum of these both revenues sastify)arrow_forwardOnce upon a time on the tiny island of Nor, all of the people were involved in their daily labor - knocking coconuts out of trees, carrying them to a pick-up point, and delivering them from the pick-up point to the market. All of the people, except Frick and Frack, that is. Frick and Frack were not feeling well on this day and were sitting, listless, under a palm tree. As they sat, Frick was, almost subconsciously, picking up palm leaves and weaving them together, in and out, in and out. Frack glanced down at Frick's work and asked, "What are you makin' there?" Frick looked down and puzzled, "I'm not really making nothing." But, actually, he had made something. It was a small mat. Frack said, "Keep going," and, pretty soon, the mat was about a square foot. The two of them pondered what could be done with this collection of palm leaves when, suddenly, Frack said, "Keep going, but start weaving the leaves tighter." As Frick progressed, the sides of the mat began to turn up, and…arrow_forwardFirms must typically purchase inputs from suppliers to produce output. What effect might suppliers have on an industry? O A. If an input is specialized, then the supplier is likely to have the bargaining power to limit a firm's profits. O B. Suppliers cannot affect output markets, although an output market with only a few firms is likely to have the bargaining power to limit a supplier's profits. Oc. If many firms can supply an input, then suppliers are likely to have the bargaining power to limit a firm's profits. O D. If only a few firms can supply an input, then markets will likely experience shortages because firms are unable to produce sufficient output. O E. If suppliers are price takers, then a firm will likely be a price taker with no ability to raise price.arrow_forward
- The table below shows the computer server installation options and their benefits and costs for a small firm. The total cost of installing 2 units of servers is: Number of servers Total Benefit Marginal Benefit Total Cost Marginal Cost $1,000 $900 $1,400 $100 $300 S1,200 4. $1.900 S1,500 $2,000 $100 $400 O S100 O S1,000 $900 O S1,200arrow_forward1. Rio live in a town with 300 adults and 200 children, and he is thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000 except all cost like maintenance costs until two years, but selling an extra ticket has zero marginal cost. Here are the demand schedules for his two types of customer: Price Adults Children $10 9. 100 8 200 7 300 300 300 100 4 300 200 300 200 300 200 1 300 200 300 200 c. Suppose next year government imposes tax equals $4 for selling an every extra ticket, what price would he charge for an adult ticket? For a child's ticket? How much the profit? Assume the law prohibiting him from charging different prices to different customers doesn't exist. (Hint: fixed cost doesn't include)arrow_forwardSuppose the capacity of the Salt Lake City Bees stadium is 25,000 seats. What is the profit maximizing price of a ticket? (Assume capacity constraints hold and that marginal cost is zero up to the capacity of the stadium.) O $60 O $50 O $40 O $10arrow_forward
- 6 If a firm is producing a given level of output in an economically efficient manner, then it must be the case that Multiple Choice O this is the lowest cost method f producing that output. each input is producing its maximum marginal product. this output level is the most that can be produced with the given level of inputs. both "this is the lowest cost method of producing that output" and "this output level is the most that can be produced with the given level of inputs". None of the choices are correct.arrow_forwardQuestion 3 Economies of scope are: O when one buyer or seller in a market has the ability to exert significant influence over the quantity of goods and services traded or the price at which they are sold. O when average unit costs decline as cumulative volume increases. when cost of producing and selling multiple products together is lower than the cost of producing and selling the same quantity of goods individually. when average unit costs decline as a good or service is produced or sold in larger volume.arrow_forwardEric and Kyle are fishermen with different equipment and, as a result, different costs for catching fish. Eric’s costs for catching fish are $1,000 per ton for the first five tons and then $2,500 per ton for any additional tons. Kyle can harvest fish at a cost of $3,000 for the first 15 tons and then $1,400 for any additional tons. a. If society wants 30 tons of fish and for some reason will only allow one of the two guys to do all the fishing, which one should society choose if it wants to minimize the cost of catching those 30 tons of fish? How much will the total cost of catching the fish be? What will the average cost per ton be for the 30 tons? b. If society wants 30 tons of fish and wants them for the least cost regardless of who catches them, how much should Eric and Kyle each catch? How much will the total cost of catching 30 tons be? What will the average cost per ton be for the 30 tons? c. Suppose that Eric and Kyle can both sell whatever amount of fish they catch for $3,000…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education