Question 2 a) The supply curve of a product is Q = 10P¹/³. Find the producer surplus when P=8. b) The number of kilograms Q of tomatoes harvested from a field in a day is given by the production function, Q = 150L¹/3. Find the profit maximizing number of people to employ on this farm if each kilogram of tomatoes is sold for 20 cedis, and each worker is paid an average wage of 40 cedis per day. c) A firm is breaking even in a competitive market. Is this firm making zero profits? Explain d) A car wash business washes 11,000 cars per year. The price charged per vehicle washed is 10 cedis. The total cost (total economic cost) of washing these 11000 cars each year is given as 120,000 cedis. Included in this total cost is a fixed cost of 15 percent of the 160,000 cedis capital provided by the financier of this car wash. That is, the financier could have earned 15 percent interest on this capital in the money market if he had not used it to set up this car wash. Is this car wash making profits at the end of the year? Compute the profit. If the firm is not making profits, should it shut down? i. ii. (10

Question 2 a) The supply curve of a product is Q = 10P¹/³. Find the producer surplus when P=8. b) The number of kilograms Q of tomatoes harvested from a field in a day is given by the production function, Q = 150L¹/3. Find the profit maximizing number of people to employ on this farm if each kilogram of tomatoes is sold for 20 cedis, and each worker is paid an average wage of 40 cedis per day. c) A firm is breaking even in a competitive market. Is this firm making zero profits? Explain d) A car wash business washes 11,000 cars per year. The price charged per vehicle washed is 10 cedis. The total cost (total economic cost) of washing these 11000 cars each year is given as 120,000 cedis. Included in this total cost is a fixed cost of 15 percent of the 160,000 cedis capital provided by the financier of this car wash. That is, the financier could have earned 15 percent interest on this capital in the money market if he had not used it to set up this car wash. Is this car wash making profits at the end of the year? Compute the profit. If the firm is not making profits, should it shut down? i. ii. (10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Please find the atttached photo.
Kris wants to open a BBQ restaraunt. He has signed a 12- month lease at $6,000 per month. The lease enabled him to rent a restaraunt with all the equipment he needs to make BBQ; therefore, K equals 1. Kris must pay his workers a monthly salary of $2,400 each. His production function is q = 100L1/2K1/2 where q is the quantity of BBQ prepared per month in pounds, L is the number of workers employed per month, and K is the quantity of capital employed, and, as previously indicated, K is assumed to equal 1. What does Kris's monthly total cost expressed as a function of quantity equal?
Consider the following production function for a firm: y=(x1-1)(x2-1), if x1≥1 and x2≥1; and y=0, if either x1<1 or x2<1: Find the firms supply function and verify the law of supply.
The supply of Pespi is given by the following equation: Q p S = −24 + 6Pp + Pc + 2Pw where Q p S is the quantity of Pespi supplied, in millions of litres, Pp is the price of Pespi per litre, Pc is the price of Coek per litre; and Pw is the price of the water used to make the products per litre. (a) Graph the inverse supply curve when Coek sells for $4 a litre and water sells for $2 a litre What is the supply choke price? (b) How much Pespi will be supplied at a price of $4 and a price of $8?
A software firm has only two inputs to production: domestic programmers based in the firm's U.K. office and international programmers working from home in low-cost countries. The two types of programmers are perfect substitutes but domestic programmers are more productive due to better communication in the office. The production function is: S=2D + I Where S is the amount of software written, D is the number of domestic programmers and I is the number of international programmers. Programmers can work part-time, so hiring 0.3 of a programmer would be possible. (a) The firm must produce 10 pieces of software this year. Show the firm's isoquant in a suitably labelled graph. Put "domestic programmers" on the vertical axis and "international programmers" on the horizontal axis. Label each axis from 0 to 10. (b) A domestic programmer can be hired for £100,000 per year. An international programmer can be hired for £60,000 per year. On the same graph, show the different combinations of…
Given the input-output matrix below, find the output matrix if final demand changes to 600 for water, 130 for electric power, and 700 for agriculture. The output matrix is x = (Round to two decimal places as needed.) Given the input-output matrix below, find the output matrix if final demand changes to 600 for water, 130 for electric power, and 700 for agriculture. Industry Electric Water Power Agriculture Final Demand Water 160 300 200 Industry: Electric Power 80 120 300 Agriculture 240 60 200 Other 320 120 300 22201 400 The output matrix is X= (Round to two decimal places as needed.)
The production function is given by Q=10L+2K. The wage for labor is $20 dollar per unit and price for capital is $5 per unit. The optimal bundle (L, K) to minimize cost is: (0, Q/2) (Q/20, Q/4) (Q/15, Q/3) (Q/10, 0)
What is the significance of resource pricing?Explain how the factors determining resource demand differ from those determining product demand. Explain the meaning and significance of the fact that the demand for a resource is a derived demand. Why do resource demand curves slope downward? What factors determine the elasticity of resource demand? What effect will each of the following have on the elasticity or the location of the demand for resource C, which is being used to produce commodity X? Where there is any uncertainty as to the outcome, specify the causes of that uncertainty.
What did Lewis mean when he wrote that there was a surplus of labor in agriculture? How does one measure that surplus? To what standard is labor in surplus, that is, in surplus relative to what?
A gardener is trying to maximize profit by growing tomatoes (T) and carrots(C) with fertilizer(F). The production functions are: Tomatoes: T = 70F₁ - 1.5F-² Carrots: C = 90Fc - 2Fc² Constraint: FT + Fc = 60 The profit is $0.50 per tomato and $0.25 per carrot. There are 60 units of fertilizer available. How much fertilizer should go to the tomatoes?
None
3. Consider a market for a good with the following demand function: Q = 120-2p where is quantity demanded and p is the price. Suppose the cost of producing Q units of the good be: C(Q) = Q² (a) If this market is perfectly competitive, what will be market price (pc) of the good and total output, (Qc).