Refer to the table below. Behaving as a "rational optimizer," how many units of this activity should be carried out? Units of Total Total Activity Cost Benefit 0 $0 $0 $2 $12 $6 $22 $12 $30 $20 $36 $30 $40 $42 $42 $56 $43 1 2 3 4 5 6 7 A. 2 B. 3 C. 4 D. 5 5 6

Refer to the table below. Behaving as a "rational optimizer," how many units of this activity should be carried out? Units of Total Total Activity Cost Benefit 0 $0 $0 $2 $12 $6 $22 $12 $30 $20 $36 $30 $40 $42 $42 $56 $43 1 2 3 4 5 6 7 A. 2 B. 3 C. 4 D. 5 5 6

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 4 a. Explain any two process technologies for materials. b. Discuss any three factors that will help to determine the type of production process used. c. Distinguish between design capacity and effective capacity. Provide a brief example. d. Why is the capacity decision important? e. A regional bank training center has the physical ability to handle 1,300 participants. However, management personnel believe that only 1,100 participants can be handled effectively for most training sessions. The last training session, although forecasted to have 1,000 participants, resulted in the attendance of only 990 participants. Calculate the utilization and efficiency of the training facility.
Share your example of: diminishing marginal benefit rising marginal cost
a) At 200 units of the activity, marginal benefit is $__________ and marginal cost is $__________. b) Adding the 200th unit of the activity causes net benefit to __________ (increase, decrease) by $__________. c) At 700 units of the activity, marginal benefit is $__________ and marginal cost is $__________. d) Subtracting the 700th unit of the activity causes net benefit to __________ (increase, decrease) by $__________. e) The optimal level of the activity is __________units. At the optimal level of the activity, marginal benefit is $__________ and marginal cost is $__________.
Three college students are considering operating a tutoring business in economics. This business would require that they give up their current jobs at the student recreation center, which pays $6,000 per year. A fully equipped facility can be leased at a cost of $8,000 per year. Additional costs are $1,000 a year for insurance and $.50 per person per hour for materials and supplies. Their services would be priced at $10 per hour per person. a. What are fixed costs? b. What are variable costs? c. What is the marginal cost? d. How many student hours would it take to break even ?
3 2. A decision at the margin Jake is a hard-working college sophomore. One Tuesday, he decides to work nonstop until he has answered 110 practice problems for his economics course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem. Time Total Problems Answered 8:00 AM 0 9:00 AM 50 10:00 AM 80 11:00 AM 100 Noon 110 Use the table to answer the following questions. The marginal, or additional, gain from Jake’s first hour of work, from 8:00 AM to 9:00 AM, is problems. The marginal gain from Jake’s third hour of work, from 10:00 AM to 11:00 AM, is problems. Later, the teaching assistant for Jake’s economics course gives him some advice. “Based on past experience,” the teaching assistant says, “working on 25 problems raises a student’s exam score by about the same amount as reading the textbook for 1 hour.” For…
c) At 700 units of the activity, marginal benefit is $__________ and marginal cost is $__________. d) Subtracting the 700th unit of the activity causes net benefit to __________ (increase, decrease) by $__________.
The cost-benefit principle states that a decision should NOT be pursued if the Select one: a. costs are negative. b. costs are greater than the benefits. c. benefits are positive. d. benefits are greater than the costs.
What are the three problem goals of Benefit-cost analysis?
In economics, what is the term for the highest-valued alternative that must be sacrificed when making a decision? A. Marginal cost B. Opportunity cost C. Sunk cost D. Average cost