Reference no: EM131019241
Homework 4
1. The firm produces pencils or erasers using only one machine, Super Machine. Super Machine can produce either pencils or erasers (it cannot make both). When this firm produces pencils, the business's revenue is $50, and there is a production cost of $10. If this firm uses Super Machine to produce erasers, the business's revenue is $80 and the production cost is $20. Presently, the firm produces pencils. There is no other cost for production such as depreciation.
(a) What is the accounting profit?
(b) What is the economic profit?
(c) Why are the accounting and economic profits different?
(d) Should this firm continue to produce pencils or change to producing erasers? Explain your answer?
(e) In order to buy Super Machine, this firm paid $15,000 (Fixed Cost). Is this cost important for deciding the optimal quantity to produce? Explain your answer?
2. Consider a firm that operates in a competitive industry. The total and marginal cost curves for the firm are given as follows:
TC=3000000+0.001 Q2
MC=0.002Q
(a) Suppose the firm's product is currently selling at $100 per unit, what is the firm's profit maximizing quantity?
(b) What is the average cost for this firm?
(c) Should the firm operate or shutdown in the short run? Why?
3. Please finish the entire table below: (If there is no meaningful answer, please put N/A in that entry.)
Q
|
TVC
|
MC
|
AVC
|
TFC
|
TC
|
AFC
|
ATC
|
0
|
|
|
|
|
100
|
|
|
1
|
|
50
|
|
|
|
|
|
2
|
|
|
|
|
|
|
95
|
3
|
|
|
140/3
|
|
|
|
|
4
|
|
|
|
|
300
|
|
|
Note: Q: quantity, TVC: Total variable cost, MC: Marginal Cost,
AVC: Average variable cost, TFC: Total fixed cost, TC: Total Cost
AFC: Average fixed cost, ATC: Average total cost
4. Firm A can produce a unit of output with 10 hours of labor and 5 units of material. Firm B can produce a unit of output with 5 hours of labor and 10 units of material. Firm C can produce a unit of output with 10 hours of labor and 10 units of material. If the prices of labor and material are $10 per hour and $5 per unit, respectively, which firm is the most technologically efficient?
5. The figure below shows three curves, MC, ATC and AVC, for the firm in a perfectly competitive market. Presently, in this market, the price of the good is $3. Use this graph to answer the following questions.
Note: At Point A, the price is $4.7 and the quantity is 11.
(a) What is the optimal quantity of goods for this firm to sell if the price is $3?
(b) Among the following labels, what is the appropriate label to describe the situation described in part (a)?
(1) Shut Down
(2) Loss
(3) Break-Even
(4) Economic Profit
(c) Is there any economic profit or economic loss? If so, calculate this value?
(d) What is the point (A, B, C or D) at which the situation is break-even for this firm?
(e) What is the shut-down price for this firm?
How much entropy do you create in the process
: How many possible arrangements are there for a deck of 52 playing cards? (For simplicity, consider only the order of the cards, not whether they are turned upside-down, etc.) Suppose you start with a sorted deck and shuffle it repeatedly, so that ..
|
Amos differential amplifier
: AMOS differential amplifier biased with a current source I =200 μA is found to switch currents completely to one side of the pair when a difference signal vid =0.3 V is applied. At what overdrive voltage will each of Q1: and Q2: be operating when ..
|
Develop projected financial statements that fully assess
: Develop Projected Financial Statements that fully assess and evaluate the impact of the proposed strategy. A full balance sheet, income statement, and eps/ebit analysis.
|
Compute the entropy over long time scales
: Consider a system of two Einstein solids, with NA = 300, NB = 200, and qtotal = 100. Compute the entropy of the most likely macrostate and of the least likely macrostate. Also compute the entropy over long time scales, assuming that all microstate..
|
What is the shut-down price for firm
: What is the optimal quantity of goods for this firm to sell if the price is $3 - What is the shut-down price for this firm?
|
Find the dominant strategy of each firm
: Find the dominant strategy of each firm if the two firms do not cooperate with one another. Does this dominant strategy represent a Prisoner's Dilemma? Will the firms be able to achieve the outcome (10, 10)? Explain your answer
|
What temperature would the sackur-tetrode equation predict
: Suppose you start with a sample of helium at room temperature and atmospheric pressure, then lower the temperature holding the density fixed. Pretend that the helium remains a gas and does not liquefy. Below what temperature would the Sackur-Tetro..
|
Identify opportunities for u.s. companies might you foresee
: This assignment is designed to assess your critical thinking, problem solving, and communication skills. Your paper will be graded for its clarity, relevance, coherence, logic, and depth.
|
Difference between the three paradigms
: Explain, in your own words, the difference between the three paradigms: human needs, interactive, and unitary process. Which of these best fits your philosophy of nursing?
|