Business Week, in an article dealing with management, wrote, "When he took over the furniture factory three years ago ... [the manager] realized almost immediately that it was throwing away at least $100,000 a year worth of wood scrap. Within a few weeks, he set up a task force of managers and workers to deal with the problem. And within a few months, they reduced the amount of scrap to $7,000 worth [per year]." Was this necessarily an economically efficient move? Explain your answer.
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Business Week, in an article dealing with management, wrote, "When he took over the furniture factory three years ago ... [the manager] realized almost immediately that it was throwing away at least $100,000 a year worth of wood scrap. Within a few weeks, he set up a task force of managers and workers to deal with the problem. And within a few months, they reduced the amount of scrap to $7,000 worth [per year]."
Was this necessarily an economically efficient move? Explain your answer.
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- Until recently, Mark worked as a financial advisor, earning $65,000 annually. Then he inherited a piece of commercial real estate that had been renting for $14,000 annually. Mark decided to leave his job and operate a sea food restaurant in the space he inherited. At the end of the first year, his books showed total revenues of $300,000, and paid a total cost of $200,000 for food, utilities, cooks, and other supplies: Show all your work including formulas learned to support your answer for each of the following: A) Calculate his explicit costs: B) Calculate his implicit costs. C) Calculate his accounting profits. D) Calculate his economic profits.Suppose that your friend operates a pizza restaurant in the building he owns. Similar buildings in the neighborhood rent for $4,000 per month. He is considering selling the building and renting space in the suburbs for $3,000 a month, but he decides not take the move. He reasons: “ I would like to have a restaurant in the suburbs, but I pay no rent for my restaurant now, I do not want to see my costs rise by $3,000 per month”. What do you think about his reasoning? Is his reasoning correct?Ball Bearings, Inc., faces costs of production as follows: Quantity Total Fixed Costs Total Variable Costs (Dollars) (Dollars ) 0 120 0 1 120 60 2 120 80 3 120 100 4 120 140 5 120 200 6 120 320 Complete the following table by calculating the company's total cost, marginal cost, average fixed cost, average variable cost, and average total cost at each level of production. Quantity Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost (Dollars) ( Dollars) (Dollars) (Dollars) (Dollars) 0 1 2 3 4 5 6 The price of a case of ball bearings is $60. Seeing that the company can't make a profit, the company's chief executive officer (CEO) decides to shut down operations. The firm's profit in this case is. (Note: If the firm suffers a loss, enter a negative number in this cell.) True or False: This was a wise decision. True False Vaguely remembering an introductory economics course, the chief financial officer tells the CEO it is better to produce 1 case of ball…
- Jason owns a small pizza restaurant, where he works full time in the kitchen. His total revenue last year was $136,000, and his rent was $2,610 per month. He pays his one employee $2,200 per month, and the cost of ingredients and overhead averages $960 per month. Jason could earn $32,600 per year as manager of al competing pizza restaurant nearby. What's Jason's accounting profit for the entire year? Your Answer: AnswerBall Bearings, Inc., faces costs of production as follows: Quantity Total Fixed Costs Total Variable Costs (Dollars) (Dollars) 0 180 0 1 180 80 2 180 140 3 180 180 4 180 240 5 180 320 6 180 450 the following table by calculating the company's total cost, marginal cost, average fixed cost, average variable cost, and average total cost at each level of production. Quantity Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 0 1 2 3 4 5 6 The price of a case of ball bearings is $80. Seeing that he can't make a profit, the company's chief executive officer (CEO) decides to shut down operations. The firm's profit in this case is . (Note: If the firm…Danielle decides to withdraw her savings of $70,000 and invest in starting her own clothing business. She normally earns $3,000 in interest from her savings. If Danielle earned an accounting profit of $60,000 last year, what was her economic profit?
- Suppose Jill Johnson operates her pizza restaurant in a building she owns in the center of the city. Similar buildings in the neighborhood rent for $4000 per month. Jill is considering selling her building and renting space in the suburbs for $3000 per month, but she decides not to make the move. She reasons: “I would like to have a restaurant in the suburbs, but I pay no rent for my restaurant now, and I don’t want to see my costs rise by $3000 per month.” Evaluate Jill’s reasoning. What is the difference between a firm’s shutdown point in the short run and in the long run? Why are firms willing to accept losses in the short run but not in the long run? Number of Workers Mushrooms per Day (pounds) 1 12 2 30 3 45 4 50 5 54 6 56 The table above shows the technology of production at the Matsuko's Mushroom Farm for the month of May. a. What is the marginal product of the 4th worker? What is the average product of labor when the farm hires 5 workers? Diminishing marginal…In 1997 Fuller and coworkers at Texas A&M University estimated the operating costs of cotton gin plants of various sizes. The operating costs of the next to the smallest plant is shown in the following tall 2000 4000 6000 8000 10000 12000 163,200 230,480 301,500 376,160 454,400 536,400 Here is the annual number of bales produced, and y is the dollar total cost. (Use 4 decimal places in your answer) A Determine the best fitting line using least squares. Also determine the square of the correlation coefficient. The best fitting line is C(x)- 37.3203x+82448.0000 The square of the correlation coefficient is ²-0.998719249 B. The study noted that revenue was $63.25 per bale. At what level of production will this plant break even? The revenue equation is R(x)- 63.25x The profit equation is P(x)- 25.9297x-82448 The production will break even when 3179.6725 bales are produced. C. What are the profits or losses when production is 3000 bales? 4000 bales? (Round to the nearest cent.) When 3000…Q9. A firm sold 20,000 SD cards at $50 each in the previous year. The firm also spent $600,000 on hiring labour, $50,000 on capital equipment and $200,000 on raw materials. If the factory is on a land that could have been rented out for $30,000 per year if it wasn't being used- State the formulae and calculate accounting profit and economic profit.
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