After running a successful pineapple business, Diddy looks for a new business venture. Now he wants torun gold mining business named "Diddy Bling Bling" which produces/sells raw gold.For simplicity, two types of inputs are required to produce raw gold (workers and gold mine). In short-run production, the size of gold mine is fixed while the number or workers can vary.After consulting his business consultant, Diddy computes the following cost table.The quantity ofraw gold (kilograms)Averaged Total Cost(gold mine size=small)Averaged Total Cost(gold mine size-medium)Averaged Total Cost(gold mine size-Large)1700140018002600130017003500120016004400110015005300100014006400900130075008001200861060011009700500100010800400900119003758001211002507001312004006001413004905001514006004001615007003501716008003001817009003501918001000400201900110050021200012006002221001300700Draw Diddy Bling Bling's Long-run averaged total cost curve. Be accurate on the numbers and scales

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Answered: After running a successful pineapple…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Marginal Cost (using total cost) Quantity Total Variable Marginal Cost Cost Cost (using variable cost) $300 $0 --- --- 1 350 50 $50 $50 2 390 90 $40 $40 420 120 4 450 150 490 190 540 240
briefly explain returns to scale. Explain the variable costs in the cost function
The Mini-Case "Economies of Scale at Google describes economies of scale for Google Cloud Storage. The cost function for this service is well-approximated by K C(q)-F+cq where C is total cost, F is fixed cost, c is a constant and q is output. What is marginal cost for this cost function? What are the average fixed cost, average variable cost, and average cost? Over what range of output does Google have economies of scale? The marginal cost function (MC) is The average fixed cost function (AFC) is AFC- The average variable cost function (AVC) is AVC- MC-C The average cost function (AC) is AC- (Property format your expressions using the tools in the palette. Hover over tools to see keyboard shortcuts. Eg, a fraction can be created with the character) Time Remaining: 02.09.09
Assume the following total cost function: Total Cost $75 1 105 128 What is the average fixed cost of producing 2 units? What is the marginal cost of producing 2 units?
Joe quits his computer programming job, where he was earning a salary of $70,000 per year, to start his own computer software business in a building that he owns and was previously renting out for $20,000 per year. In his first year of business he has the following expenses: salary paid to himself, $45,000; rent, $0; and other expenses, $40,000. Find the accounting cost and the economic cost associated with Joe's computer software business. (Enter numeric responses using an integer.) The accounting cost of Joe's business is $ (Enter your response as an integer.) es Get more help Clear all Check answer
Bob the Builder is currently producing 20 bookshelves at à total cost of $2,000. His average variable cost is $90. What are Bob's fixed costs? Bob's fixed costs must be $
Ten-year old Sarah is starting a lemonade stand, she uses baskets of lemons (L) and other ingredients (O). She is able to produce lemonade according to the production function f(L, O) = 1 2 L 2O. The cost of a basket of lemons is $10 and the average cost of the other goods is $4. (a) Derive MPL and MPO. (b) Currently Sarah is using 4 baskets of lemons and 40 units of the other goods. Using this information, calculate MPL and MPO. (c) True/False. At her current use of inputs Sarah is minimizing costs. If true, explain why. If false, what would you recommend Sarah do? (d) Sarah wants to produce 320 units of lemonade. Determine the cost minimizing combination of inputs to use. (e) Assuming no changes in the market price of lemonade nor in the prices of the inputs, if Sarah continues to produce 320 units of lemonade in the long run, what will Sarah’s long run costs be.
Emma sells hot chocolate outside of Yankees baseball games. They have two inputs in the production of hot chocolate: (hot chocolate mix (x1, measured in kg) and labour (x2, measured in hours. The production function for hot chocolate (in liters) is: f (x1 , x2) = (x1)1/3(x2)1/3 A) Does this firm have constant, increasing or decreasing returns to scale? The cost of hot chocolate mix is w1, and the cost of labour is w2. If Emma produces "y" liters of hot chocolate the cheapest way possible, then B) How many kilograms of hot chocolate mix would they use? C) How many hours of labour? D) What is the cost function of producing this much hot chocolate?
Label each of the following as sunk cost, opportunity cost, or incremental costs and briefly explain why: (Chapter 2) You are deciding which car to buy. Car A is $24,000 and car B is $32,000. The difference in price is $8,000. What kind of cost does this represent? Answer: Your company invested $300,000 into a study to determine the feasibility of introducing a new product line into the business. The study recommended 2 mutually exclusive feasible alternatives. What kind of cost does the $300K represent? Answer: You have 2 alternatives for a $10,000 investment. Investment A provides a $500 return and investment B provides a $700 return. If you choose Alternative B, what does the $500 return from Alternative A represent? Answer:
The manager of a T-shirt stand found that the cost to produce 10 T-shirts is $105.68, while the cost to produce 40 T-shirts is $402.98. Assume the cost C(x) is a linear function of x, the number of T-shirts produced. Calculate the marginal cost of a T-shirt, that is, the change in cost of producing one additional T-shirt. (Round to 2 decimal places)
Answer the question on the basis of the following cost data. Average Fixed Average Variable Output Cost Cost 1 $ 50.00 $ 100.00 2 25.00 80.00 3 16.67 66.67 4 12.50 65.00 5:35 5 10.00 68.00 6 8.37 73.33 7 7.14 80.00 8 6.25 87.50 The marginal cost of the sixth unit of output is Multiple Choice О $440.00. $8.37.
Let F be the fixed cost of production, let VC be the variable cost of production, C be the total cost, MC be the marginal cost, AFC, the average fixed cost, AVC, the average variable cost, and AC, the average cost. Complete the following cost table. (Enter numeric responses rounded to two decimal places.) Output (q) 1 2 3 4 5 6 7 8 9 10 F $250 250 250 250 250 250 250 250 250 с MC AFC AVC AC $266 $16 $250.00 $16.00 $266.00 12 125.00 14.00 139.00 8 83.33 12.00 4 62.50 10.00 72.50 298 50.00 59.60 8 310 12 41.67 10.00 51.67 76 326 35.71 10.86 46.57 96 346 20 12.00 43.25 41.11 27.78 13.33 120 370 24 148 28 25.00 14.80 VC $16 28 278 36 286 40 48

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