Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods, which pays Paducah $10 foreach finished bat. Paducah's only factors of production are lathe operators and a small building with a lathe. The number of bats perday it produces depends on the number of employee-hours per day, as shown in the table belowa. The wage is $15 per hour and Paducah's daily fixed cost for the lathe and building is $60.Instructions: Complete the table below if you are entering any negative numbers be sure to include a negative sign (-) in front ofthose numbers. Enter your responses as whole numbers(bats per.514252530Number ofemployee-hoursper day•147111422Tota(5 per day)·O500100 -110 ->200 ->250 -500350 -Total laborcost(5 per day)·O25 ONOse101 -245 -240 O330Total cost60075010120 -145 ->225 -2009100Profit-60--25 O-10014035025 -OMarginalcastper butWhat is the profit maximizing quantity of bats?20 batsb. What would Paducah's profis-maximizing level of output be if the government imposed a tax of $10 per day on the company? (HineThink of this tax as equivalent to a $10 increase in fixed cost)batsc. What would Paducah's profit maximizing level of output be if the government imposed a tax of $2 per bat instead of the $10 tex ofpart t? (Hint Think of this taxa $2 per bat increase in the firm's marginal cost)batsd Why do the taxes in parts b and chave such different effects

Price per bat = $10Wage = $15 per hourDaily fixed cost = $60Marginal cost refers to the cost…

Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods, which pays Paducah $10 for each finished bat. Paducat's only factors of production are lathe operators and a small building with a lathe The number of bats per day it produces depends on the number of employee-hours per day, as shown in the table below a The wage is $15 per hour and Paducah's daily fixed cost for the lathe and building is $60 Instructions: Complete the table below if you are entering any negative numbers be sure to include a negative sign 1 front of those numbers. Enter your responses as whole numbers Chats per .. 3 34 15 n Naber per day 1 1 4 1 11 31 .O 300 1000 350 - 100 2100 10 3100 cest .O 110 NO 10 2009 341 - 300 10 SO 00 1450 20 10 10 Profit oooooooo -210 O NO 10 20 cest 20 bats b. What would Paducas profs maining level of output be if the government imposed a tax of $10 per day on the company? the ter equivalent to a $10 mcrease in fixed cost) Think bats What would Paducah's profit mang level of output be the government imposed a tax of $2 per bat stead of the $10 of part tnt Thek of the tas

Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods, which pays Paducah $10 for each finished bat. Paducat's only factors of production are lathe operators and a small building with a lathe The number of bats per day it produces depends on the number of employee-hours per day, as shown in the table below a The wage is $15 per hour and Paducah's daily fixed cost for the lathe and building is $60 Instructions: Complete the table below if you are entering any negative numbers be sure to include a negative sign 1 front of those numbers. Enter your responses as whole numbers Chats per .. 3 34 15 n Naber per day 1 1 4 1 11 31 .O 300 1000 350 - 100 2100 10 3100 cest .O 110 NO 10 2009 341 - 300 10 SO 00 1450 20 10 10 Profit oooooooo -210 O NO 10 20 cest 20 bats b. What would Paducas profs maining level of output be if the government imposed a tax of $10 per day on the company? the ter equivalent to a $10 mcrease in fixed cost) Think bats What would Paducah's profit mang level of output be the government imposed a tax of $2 per bat stead of the $10 of part tnt Thek of the tas

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods, which pays Paducah $10 for
each finished bat. Paducah's only factors of production are lathe operators and a small building with a lathe. The number of bats per
day it produces depends on the number of employee-hours per day, as shown in the table below
a. The wage is $15 per hour and Paducah's daily fixed cost for the lathe and building is $60.
Instructions: Complete the table below if you are entering any negative numbers be sure to include a negative sign (-) in front of
those numbers. Enter your responses as whole numbers
(bats per
.
5
14
25
25
30
Number of
employee-hours
per day
•
1
4
7
11
14
22
Tota
(5 per day)
·O
500
100 -
110 ->
200 ->
250 -
500
350 -
Total labor
cost
(5 per day)
·O
25 O
NO
se
101 -
245 -
240 O
330
Total cost
600
750
10
120 -
145 ->
225 -
2009
100
Profit
-60-
-25 O
-100
140
350
25 -
O
Marginal
cast
per but
What is the profit maximizing quantity of bats?
20 bats
b. What would Paducah's profis-maximizing level of output be if the government imposed a tax of $10 per day on the company? (Hine
Think of this tax as equivalent to a $10 increase in fixed cost)
bats
c. What would Paducah's profit maximizing level of output be if the government imposed a tax of $2 per bat instead of the $10 tex of
part t? (Hint Think of this tax
a $2 per bat increase in the firm's marginal cost)
bats
d Why do the taxes in parts b and chave such different effects

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