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ENGR.ECONOMIC ANALYSIS

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Bella and Vela's Flower Shop is a store specializing in floral arrangements for weddings, graduations,
and other events. Jane and Vela’s Flower Shop has a fixed cost associated with space and equipment of
$150 per day. Each worker is paid $50 per day. The daily production function for Bella and Vela's
|Flower Shop is shown in the accompanying table. Each floral arrangement sells for $30
|Quantity of Labor (Workers)
|Quantity of Floral Arrangments
1
5
2
3
12
4
14
5
15
14
a. What is the marginal product of labor, MPL, of the first, second, third, fourth, fifth and sixth
workers? (Show on a chart).
b. What is the marginal revenue product, MRP, of each of the workers? (Show on a chart)
How many workers should Bella and Vela hire and why?
c.

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Labor Output (workers per week) (units per week) 0 1 2 3 4 5 6 0 $24.92 $31.61 $50.00 சு & 8 8 8| 50 70 85 95 100 Use the above table to answer the following 2 questions. The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. If 95 units are produced, the average total cost is O $6.31. $17.45. $26.32. $32.63. QUESTION 7 The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the marginal cost of producing the 90th unit? $10.00
Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5/day. The company also rents spave where orders are prepared. Rent costs $50/day. To make the deliveries, the business also rents two delivery cars the cost $10/day. The costs of ingredients for preparing different numbers of meals are $50. Maria also has to hire between 0-10 workers to buy ingredients, prepare meals, and deliver the orders. She pays them $120/day. The first two columns of the table below shows how many meals different number of workers can prepare and deliver. Suppose that the price of rent increases to $60/day. How many meals does the business have to deliver to earn the highest possible profit? Fill out the table as your answer.
Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5/day. The company also rents spave where orders are prepared. Rent costs $50/day. To make the deliveries, the business also rents two delivery cars the cost $10/day. The costs of ingredients for preparing different numbers of meals are $50. Maria also has to hire between 0-10 workers to buy ingredients, prepare meals, and deliver the orders. She pays them $120/day. The first two columns of the table below shows how many meals different number of workers can prepare and deliver. Suppose Maria charges $50/order and delivery. What is the max profit she could earn? How many meals does the business have to deliver to earn the highest possible profit? What is the shut-down price of the business? What is the break-even price? Suppose that the price of rent…
Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5/day. The company also rents spave where orders are prepared. Rent costs $50/day. To make the deliveries, the business also rents two delivery cars the cost $10/day. The costs of ingredients for preparing different numbers of meals are $50. Maria also has to hire between 0-10 workers to buy ingredients, prepare meals, and deliver the orders. She pays them $120/day. The first two columns of the table below shows how many meals different number of workers can prepare and deliver. Suppose that a minimum wage is introduced. To comply the new law, Maria has to start paying the workers $140/day. How many meals does the business have to deliver to earn the highest possible profit? Answer by filling out the table. Suppose that the price/meal Maria charges…
Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5 per day. The company also rents space where orders are prepared. Rent costs $50 per day. To make the deliveries, the business also rents two delivery cars that cost $10 each per day. The costs of ingredients for preparing different numbers of meals are provided in the table below. Maria also has to hire between 0 and 10 workers (depending on the number of meals she chooses to make) to buy ingredients, prepare meals, and deliver the orders. She will pay each employee $120 per day. The first two columns of the table below show how many meals different number of workers can prepare and deliver. Price per meal $50 Workers Meals (Output (Labor L) Q) 0 1 2 3 4 5 6 7 8 9 10 MPL FC Cost of ingredients VC $10 $75 $100 $121 $138 $152 $165 $177 $189 $199 $210 TC AFC 0…
Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5 per day. The company also rents space where orders are prepared. Rent costs $50 per day. To make the deliveries, the business also rents two delivery cars that cost $10 each per day. The costs of ingredients for preparing different numbers of meals are provided in the table below. Maria also has to hire between 0 and 10 workers (depending on the number of meals she chooses to make) to buy ingredients, prepare meals, and deliver the orders. She will pay each employee $120 per day. The first two columns of the table below show how many meals different number of workers can prepare and deliver. Price per meal $50 Workers (Labor L) 0 1 2 3 4 5 6 7 8 9 10 Meals (Output Q) ol- 30 42 52 60 67 73 79 85 90 95 MPL FC Cost of ingredients $10 $75 $100 $121 $138 $152…
8. Alicia Gregory owns a foot massage business. She leases 4 computer-controlled massage booths, for each of which she pays $125 per day. She cannot increase the number machines she leases without giving the manufacturer 3 months notice. She can hire as many workers as she wants at a cost of $75 per day per worker. These are the only two inputs she uses in her business. Use this information to fill in the columns in the table below. Quantity of workers 0 1 2 3 4 5 Quantity of foot massages per day 0 10 25 45 60 70 Fixed Variable cost cost vituo loota a pian Total cost 998791 012 0E2 Average total cost AUL COE Average Average Fixed Variable Cost Cost ovode lovsi tugtuo as te sieu to asi ban 180 Marginal cost
Sandra and Trey operate a small company that produces souvenir footballs. Their fixed cost is $2,000 per month. Each worker costs $1,000 per month. Their monthly production function for footballs is as given in the accompanying table. Quantity of labor (workers) 2. a. 0 2 3 Quantity of footballs 5 0 300 800 1,200 1,400 1,500 :) For each quantity of labor, calculate average variable cost (AVC), average fixed cost (AFC), average total cost (ATC), and marginal cost (MC). b.) On one diagram, draw the AVC, ATC, and MC curves.
Total cost Labor (workers) |Output (frijoles) (dollars) 1,000 1,000 3,000 10 3,000 5,000 15 4,000 7,000 20 4,500 9,000 The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. What is the average total cost of producing 4,500 frijoles? ... O A. $2 O B. $9,000 C. $8,000 O D. $225 O E. More information is needed to determine the answer.
Part 1 Total product (houses per week) Labor (students) 1 3 2 7 3 12 4 16 5 19 6 21 Lizzie hires students in the summer to do housecleaning. The table sets out Lizzie's total product schedule. What is the marginal product of the fifth student and the average product when Lizzie hires five students? The marginal product of the fifth student is 3 houses a week. The average product of 5 students is houses a week ? Part 2 Total Total variable Total product (workers (body boards per- day) Labor cost cost per day) (dollars per day) 2 84 132 4. 172 5 204 Peter's body board factory rents equipment for shaping boards and hires students. Peter pays $120 a day for equipment and $80 a day for each student hired. The table shows Peter's total product schedule. Construct Peter's total variable cost and total cost schedules. Fill in the columns in the table.
Table 3-15 Labor Hours Needed to Make 1 Pound of Meat Potatoes 5 hours/pound Farmer 8 hours/pound Rancher 4 hours/pound 10 hours/pound Amount Produced in 40 Hours Potatoes 8 pounds 4 pounds Meat 5 pounds 10 pounds Refer to Table 3-15. Assume that the farmer and the rancher each has 40 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is a. 5 pounds of meat and 4 pounds of potatoes. b. 6 pounds of meat and 7.5 pounds of potatoes. c. 7.5 pounds of meat and 6 pounds of potatoes. d. 10 pounds of meat and 8 pounds of potatoes.
Production Total Product Total Fixed Cost Total variable cost Total Cost Average fixed cost Average variable cost Average Total Cost Marginal Cost 0 0 1 25 2 45 3 60 4 70 5 85 6 105 7 135 8 180 9 240 10 315 Assume that fixed costs are $50, labor is the only variable input and its costs are reflected completely in the costs above. Complete the table Graph AFC, AVC, ATC, and MC Explain how increasing returns and decreasing returns are depicted in your graph If the labor input increased by $10 at every unit of production, what would be the effect on your graphs?

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