Reference no: EM13863453
Medfin Accounting Company (MAC) specializes in providing accounting and tax services for medical establishment and professionals. Presently, the company's production method is highly labor-intensive because many of the book keeping tasks are done manually. MAC employs 50 workers (L) paying them each, on average, $50,000 per year. MAC also has 40 computers (K). The company has leased these computers along with their accompanying software packages at $5,000 per year each. Presently the firm provides accounting and tax services to 150 clients.
a. Write the equation for the company's isocost.
b. At this given mix of inputs ( K = 40, L= 50) the firm's marginal rate of technical substitution (MPL/MPK) is -6. Is this mix of capital and labor that MAC is using efficient (optimal)? Explain as specifically as you can.
c. If your answer to (b) is no, what changes should the firm make in its production style?
d. Assuming that the firm wants to serve the same number of clients, how would the changes that you might be suggesting would affect the company's revenue, costs, and profit?
e. Now starting back from the original mix of computers (capital) and labor -- that is 50 workers and 40 computers --, suppose the company wants to increase the size of its clientele. How would you suggest the company should pursue its expansion plan? What is the most efficient approach to this expansion? Should the company hire more labor and acquire more computers right away? Be as specific as you can.
|
Explain opportunity cost
: Please explain “opportunity cost” and give three examples from your own life. Please include and identify both “explicit” and “implicit” costs in your examples.
|
|
Use the definition of strict convexity
: Trang has strictly convex indifference curves and is indifferent between the bundles (16, 2) and (2, 4). Use the definition of strict convexity to show that Trang prefers (9, 3) to (2, 4).
|
|
Specialization and Exchange
: Please select one item that you can see from where you are sitting right now – and list and describe as many people as you can think of that played a role in getting that item to where it is right now.
|
|
Find the non-zero equilibrium
: Graph these functions and find the non-zero equilibrium. Prove that the equilibrium at (0,0) is not stable. Suppose that school inputs improve by one unit, from 10 to 11. What is the immediate impact on education (before health can adjust)? What is t..
|
|
Specializes in providing accounting and tax services
: Medfin Accounting Company (MAC) specializes in providing accounting and tax services for medical establishment and professionals. Presently, the company's production method is highly labor-intensive because many of the book keeping tasks are done man..
|
|
Find the price and quantity combination
: The monthly market demand curve for calculators among economics students is given by P=100-2Q, where P is the price per calculator in dollars and Q is the number of calculators purchased per month. Find the price/quantity combination that would maxim..
|
|
Suppose the nominal interest rate is rn and inflation
: Suppose the nominal interest rate is rn and inflation is i. Assume 0
|
|
Price of a stock
: Let P be the price of a stock. The investor wants to purchase Q units of this stock. Suppose investor’s equity is E and assume that equity is strictly smaller than the value of the stock investor wants to purchase. As such, the investor receives a lo..
|
|
Save for their college expense
: A couple wants to save for their daughter’s college expense. The daughter will enter college 10 years from now and she will need $45,000, $46,000, $47,000 and $48,000 in actual dollars for 4 school years. What is the equal amount, in actual dollars, ..
|