Almonds Shorts Country (Pounds per hour of labor) (Pairs per hour of labor) Sequoia 4 16 Yosemite 6 12 Suppose that initially Yosemite uses 1 million hours of labor per week to produce almonds and 3 million hours per week to produce shorts, while Sequoia uses 3 million hours of labor per week to produce almonds and 1 million hours per week to produce shorts. As a result, Sequoia produces 12 million pounds of almonds and 16 million pairs of shorts, and Yosemite produces 6 million pounds of almonds and 36 million pairs of shorts. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of almonds and shorts it produces. Sequoia's opportunity cost of producing 1 pound of almonds is almonds is of shorts. Therefore, comparative advantage in the production of shorts. of shorts, and Yosemite's opportunity cost of producing 1 pound of has a comparative advantage in the production of almonds, and ♥ has a

Almonds Shorts Country (Pounds per hour of labor) (Pairs per hour of labor) Sequoia 4 16 Yosemite 6 12 Suppose that initially Yosemite uses 1 million hours of labor per week to produce almonds and 3 million hours per week to produce shorts, while Sequoia uses 3 million hours of labor per week to produce almonds and 1 million hours per week to produce shorts. As a result, Sequoia produces 12 million pounds of almonds and 16 million pairs of shorts, and Yosemite produces 6 million pounds of almonds and 36 million pairs of shorts. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of almonds and shorts it produces. Sequoia's opportunity cost of producing 1 pound of almonds is almonds is of shorts. Therefore, comparative advantage in the production of shorts. of shorts, and Yosemite's opportunity cost of producing 1 pound of has a comparative advantage in the production of almonds, and ♥ has a

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Your aunt gives piano lessons for $25 per hour. She also can grow tomatoes, which she can arrange and sell at the local farmer's market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds have grown into tomatoes, she can sell them for $150 at the farmer's market. Which statement is true? O Opportunity cost of growing tomatoes is $50 and she can earn an economic profit of $25. O Opportunity cost of growing tomatoes is $125 and she can earn an economic profit of $100, Opportunity cost of growing tomatoes is $50 and she can earn an accounting profit of $25. O Opportunity cost of growing tomatoes is $125 and she can earn an accounting profit of $100,
3) Ajax, Inc. assembles gadgets. It can make each gadget either by hand or with a special gadget- making machine. Each gadget can be assembled in 15 minutes by a worker or in 5 minutes by the machine. The firm can also assemble some of the gadgets by hand and some with machines. Both types of work are perfect substitutes, and they are the only inputs necessary to produce the gadgets. a) Write down the equation of the firm's production function for the firm. Let G be the number of gadgets assembled, M the number of hours the machines are used, and I the number of hours of labor. b) It costs the firm $30 per hour to use the machine and $10 per hour to hire a worker. The firm wants to produce 120 gadgets. What is the cost-minimizing input quantities? Illustrate your answer with a clearly labeled graph. d) Derive the expression for the long-run total cost that the firm incurs, as a function of q. Represent it in a diagram.
Spot the economics in the following cases by identifying the concept described within the scenario and then briefly articulating your answers When parking violations in San Francisco were $100, there were 250,000 tickets given out. When violations went up to $175 there were 200,000 violations given. Ford produces trucks and loses ⅓ of a sedan for each truck produced. When it produces sedans, it loses 2 trucks per sedan produced. Driving down Mendocino Blvd, you notice a street crew working near campus. One worker is jackhammering away, while another removes the rubble. Both are extremely productive. Two workers are talking and having a smoke, while another three are having some coffee all while watching the first two workers. Recently, I attempted to cancel my SiriusXM subscription. I logged into their website and clicked on the “cancel subscription” link which I had a hard time finding because it was hidden in some obscure menu. When I clicked on cancel, a window popped up…
Suppose there exist two imaginary countries, Yosemite and Sequoia. Their labor forces are each capable of supplying four million hours per day that can be used to produce pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be produced by one hour of labor. Country Yosemite Sequoia Pistachios (Pounds per hour of labor) 8 LO 5 Chinos (Pairs per hour of labor) 16 20
Q9. Poland requires 4 hours of labor to produce 1 ton of coal and 1 hour of labor to produce a bushel of wheat. The Czech Republic requires 6 hours of labor to produce 1 ton of coal and 1 hour of labor to produce a bushel of wheat. In Poland, what is the marginal product of labor in coal production? 0.25 tons per hour 0.4 tons per hour 2.5 tons per hour O 4 tons per hour
3. Optimal use of multiple inputs. In his shop, Jim Valenti retrofits sunroofs into automobiles. The process can use a combination of skilled labor and unskilled labor. Given his current mix of employees, the marginal product of the last unit of skilled labor is 4 sunroofs per day, and the marginal product of the last unit of unskilled labor is 1 sunroof per day. Current market rates for skilled and unskilled labor is $40 and $20, respectively. Is Julian using a least cost combination of inputs? If not, which of type of labor should he use relatively more? Comparison Expression: Result:
Suppose that the demand for loanable funds for car loans in the Milwaukee area is $12 million per month at an interest rate of 10 percent per year, $13 million at an interest rate of 9 percent per year, $14 million at an interest rate of 8 percent per year, and so on. If the supply of loanable funds is fixed at $16 million, what will be the equilibrium interest rate? Instructions: Enter your answer as a whole number. * percent per year
The table provides information about the production function for Lindsay's Farm, which uses labor and land to produce its produce. The price of labor is $50 per worker per week and the price of land is $20 per acre. Quantity of Land (acres) 10 10 10 Quantity of Labor (workers) 0 1 2 3 5 Quantity of Produce (bushels) 0 50 100 Table 55-4: Lindsay's Farm. 170 190 When Lindsay increases output from 50 units of produce to 100 units of produce, her marginal cost per unit is equal to:
Assume that Pablo and Micah can switch between producing baseballs and producing bats at a constant rate. Labor Hours Needed Quantity Produced in 36 Hours to Make 1 bat bat baseball 1 baseball 36 Pablo 3 12 Micah 2 36 18 Refer to Table 3-8. At which of the following prices would both Pablo and Micah gain from trade with each other? O a 15 baseballs for 10 bats Ob. 15 baseballs for 6 bats Oc 15 baseballs for 3 bats Od Pablo and Micah could not both gain from trade with each other at any price.
6. b) There are two firms in the economy. Each firm employs positive amounts of capital and labour. The technology satisfies diminishing marginal rate of technical substitution of labour for capital. Currently, A's marginal rate of technical substitution of labour for capital is 4 while B's marginal rate of technical substitution of labour for capital is 2. Is the current production of the two firms efficient? If not, describe an exchange of inputs that would improve efficiency. Can these production levels of the two firms be observed in a perfectly competitive equilibrium of a production and exchange economy? Explain.
An economy can produce leather using labor and capital and wheat using labor and land. The total supply of labor is 50 units. Given the supply of capital, the outputs of the two goods depend on labor input as follows: Labor Input to Leatheroutput of LeatherLabor Input of WheatOutput of Wheat 27 5 19.8 10 38.5 10 31.2 15 47.3 15 42.3 20 56 20 52.1 25 65.7 25 60.6 30 74.5 30 69 35 82.4 35 77.4 40 88.2 40 85.4 45 94.1 45 93.9 50 100 50 100 a. Graph the production functions for leather and wheat. b. Graph the production possibility frontier. What will happen if more labor is employed?
Suppose that you own a 20-acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. Instructions: Enter your answers as a whole number. a. If the price at which wheat can be sold is $6 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 20 acres? $ b. What price would the farmer pay to rent your 20 acres if the price of wheat rises to $7 per bushel?