1. Debbie, a popular wedding photographer, is able to photograph a wedding every Saturday of the year. She charges couples $4,000 for a complete set of photographs that cost her $2,200 to print and develop. Suppose that on one Saturday Debbie photographs her niece's wedding without charge, but her niece insists on paying Debbie $2,200 to cover her printing and developing costs. What is Debbie's economic cost of photographing her niece's wedding? A $4,000 B $2,200 C $1,800 D $0

1. Debbie, a popular wedding photographer, is able to photograph a wedding every Saturday of the year. She charges couples $4,000 for a complete set of photographs that cost her $2,200 to print and develop. Suppose that on one Saturday Debbie photographs her niece's wedding without charge, but her niece insists on paying Debbie $2,200 to cover her printing and developing costs. What is Debbie's economic cost of photographing her niece's wedding? A $4,000 B $2,200 C $1,800 D $0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. The relationship between marginal and average costs Consider the following scenario to understand the relationship between marginal and average values. Suppose Kenji is a professional basketball player, and his game log for free throws can be summarized in the following table. Fill in the columns with Kenji's free-throw percentage for each game and his overall free-throw average after each game. Game Result Season Total Game Free-Throw Percentage Average Free-Throw Percentage Game 1 80 2 UAWN 8/10 4/10 2/8 2/4 6/8 8/10 12/20 14/28 16/32 22/40 80
Eric 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…
1. Of the major costs of a typical family, which do you think differ most by geography and account for these purchasing power differences? (e.g. home prices/rents much higher in certain states (California, New York) compared to others (Mississippi))
Three college students are considering operating a tutoring business in economics. This business would require that they give up their current jobs at the student recreation center, which pays $6,000 per year. A fully equipped facility can be leased at a cost of $8,000 per year. Additional costs are $1,000 a year for insurance and $.50 per person per hour for materials and supplies. Their services would be priced at $10 per hour per person. a. What are fixed costs? b. What are variable costs? c. What is the marginal cost? d. How many student hours would it take to break even ?
1. Suppose your current job pays you $300,000 a year. However, you are considering starting your own company. Based upon your research, you estimate your first year total revenue to be $7,500,000. There are however several costs of running the company during this first year, such as the cost of materials which will equal $2,750,000, employees who will receive in total $1,500,000, utilities which will cost $1,200,000, and rent that will be paid to the landlord that equals $1,800,000. Based on this information, solve for both your accounting profit and economic profit during this first year. Also, based upon these profit values, state whether you are better off starting this company or staying in your current job.
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Imagine a very talented young person who has just graduated from high school and has been offered a 4-year contract worth ten million dollars to play professional basketball for the LA Bakers, and has also received an offer of acceptance to UCLA with full fellowship. The fellowship covers her tuition, room, and board, along with a generous monthly stipend of 2500 dollars for living expenses for 4+1 years. Which of the following is true for this scenario? ( Remember: the cost of something is what you give up to get it!)A) The cost of the four years of college education for this person is very high, in the range of millions of dollars.B) The cost of the four-years of college education for this person is almost zero because of the generous fellowship and financial aid package she has received.C) The cost of the four years of college education for this is person is the sum of the tuition, room, and board expenses, plus the monthly stipend of 2500 dollars for 4 years.D) The rational choice…
3. The company that you manage has already spent $8 million on developing a new product – awebsite that combines You Tube, Twitter, and Facebook – called You Twit Face. Thedevelopment is not quite finished. It will cost an extra $2 million to finish development andcomplete the product. Assume that this $2 million amount includes the explicit costs and anyopportunity cost that the company may have. At a recent meeting, your salespeople report thatthe expected sales of your new product (if you finish) are $6 million total. If you do not finishdeveloping the product you can sell the incomplete product to another company for $2 million. What is the MC of finishing the development? __________________ What is the MB of finishing the development? __________________ Should you finish the product? Why or why not? Use the idea of “thinking at the margin” toexplain your answer. Need details explanation