Scenario: Assume that there are five apartments located at differentdistances from an individual's place of work-very close, close, far, veryfar, and extremely far. The individual makes his choice by studying thechange in costs as he moves farther from his place of work. He has tochoose between renting one of the five apartments. The movement fromapartment Very Close to Close has a marginal cost of -$60, a movementfrom apartment Close to Far has a marginal cost of $40, a movementfrom apartment Far to Very Far has a marginal cost of -$10, and amovement from apartment Very Far to Extremely Far has a marginal costof $20.Refer to the scenario above. Which of the following is used to arrive atthe optimum decision in the scenario?Total net benefit approachPrinciple of Optimization at the MarginBefore and after comparisonsOptimization using total value The following figure shows an individual's total cost of renting fourapartments located at different distances from her place of work.Costs ($)110010009008007006005004003002001000Apartment 1Apartment 3Apartment 2Apartment 1Apartment 4Apartment 2Apartment 3Apartment 4Refer to the figure above. Which apartment is the best feasible choice forthe individual?Cost CurveApartments

There are 5 apartments to choose from .Based on their location they are as follows-1 ) Very Close…

Scenario: Assume that there are five apartments located at different distances from an individual's place of work-very close, close, far, very far, and extremely far. The individual makes his choice by studying the change in costs as he moves farther from his place of work. He has to choose between renting one of the five apartments. The movement from apartment Very Close to Close has a marginal cost of -$60, a movement from apartment Close to Far has a marginal cost of -$40, a movement from apartment Far to Very Far has a marginal cost of -$10, and a movement from apartment Very Far to Extremely Far has a marginal cost of $20.

Scenario: Assume that there are five apartments located at different distances from an individual's place of work-very close, close, far, very far, and extremely far. The individual makes his choice by studying the change in costs as he moves farther from his place of work. He has to choose between renting one of the five apartments. The movement from apartment Very Close to Close has a marginal cost of -$60, a movement from apartment Close to Far has a marginal cost of -$40, a movement from apartment Far to Very Far has a marginal cost of -$10, and a movement from apartment Very Far to Extremely Far has a marginal cost of $20.

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

5. The annual output for a luxury hotel chain is given by Q = 30K²/5 L¹/2 R¹/4, where K, L and R are the capital, labor and real estate inputs, all measured in $1,000,000 s, and Q is the average number of rooms rented per day. The hotel chain's annual budget is B = $69 million. (a) How should they allocate this budget to the three inputs in order to maximize their annual output? What is the maximum output? (b) What is the approximate change in the firm's maximum output if their annual budget increases by $500,000? Explain your answer.
Jacques lives in Detroit and operates a small company selling bikes. On average, he receives $773,000 per year from selling bikes. Out of this revenue from sales, he must pay the manufacturer a wholesale cost of $452,000. He also pays several utility companies, as well as his employees wages totaling $277,000. He owns the building that houses his storefront; if he choose to rent it out, he would receive a yearly amount of $3,000 in rent. Assume there is no depreciation in the value of his property over the year. Further, if Jacques does not operate the bike business, he can work as a nurse and earn a yearly salary of $32,000 with no additional monetary costs, and rent out his storefront at the $3,000 per year rate. There are no other costs faced by Jacques in running this bike company. Identify each of Jacques's costs in the following table as either an implicit cost or an explicit cost of selling bikes. Implicit Cost Explicit Cost The wages that Jacques pays The wholesale cost for the…
QUESTION 3 Zeus owns a factory which makes guitars which sell for $400 each. The number of guitars he can make in a month depends on the size of his crew. He pays each person on his crew $1500/month. He also pays rent on a building, which he has leased for the remainder of the year for $2000/month. The table below indicates how many guitars can be built, as a function of the size of his crew (the crew size excludes himself). You may assume all other cost, such as materials, are 0. Size of Crew Total # of Guitars 1 4 2 8 3 19 4 28 5 40 6 50 7 58 8 earns without a dollar sign and without a comma). 64 The size of the crew that maximizes the firm's profits is 9 67 10 70 11 72 12 The Marginal product of labor is the additional output per worker. Crew member delivers the greatest marginal product. 74 13 and Zeus dollars in profit per month (please record your answer 75
Julius builds dining chairs that he sells for $200 a chair. His fixed costs are $1,000 (for workshop equipment). Each chair costs him $50 in materials to produce plus an extra $25 for each previous chair made that day, which reflects Julius's increasing exhaustion. (Thus, the first chair cost $50, the second costs $75, the third cost $100, etc.) Assume time requirements in producing a chair are not a factor. How many chairs should Julius produce each day?
26. Suppose that you can schedule a worker for up to 4 hours per day. The total benefit andtotal cost functions are B(H) = 300H −20H2 and C(H) = 500H +60H2. The correspondingformulas for marginal benefit and marginal cost are MB(H) = 300 − 40H and MC(H) =500 + 120H. For how many hours should you schedule the worker?(a) 1.25 hours(b) 0.8 hours(c) 4 hours(d) 0 hours
Consider an airline's decision about whether to cancel a particular flight that hasn't sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers. Total Cost Number of Passengers (Dollars per flight) 40,000 10 60,000 20 65,000 30 68,000 40 70,000 50 71,000 60 72,500 70 73,500 80 74,000 90 74,300 100 74,500 Given the information presented in the previous table, the fixed cost to operate this flight is s At each ticket price, a different number of consumers will be willing to purchase tickets for this flight. Assume that the price of a flight is fixed for the duration of ticket sales. Use the previous table as well as the following demand schedule to complete the questions that follow. Price Quantity Demanded (Dollars per ticket) (Tickets per flight) 1,000 700 30 400 90 200 100
Label each of the following as sunk cost, opportunity cost, or incremental costs and briefly explain why: (Chapter 2) You are deciding which car to buy. Car A is $24,000 and car B is $32,000. The difference in price is $8,000. What kind of cost does this represent? Answer: Your company invested $300,000 into a study to determine the feasibility of introducing a new product line into the business. The study recommended 2 mutually exclusive feasible alternatives. What kind of cost does the $300K represent? Answer: You have 2 alternatives for a $10,000 investment. Investment A provides a $500 return and investment B provides a $700 return. If you choose Alternative B, what does the $500 return from Alternative A represent? Answer:
Problem 1. Costs for Sedate Sedan, Inc. (adapted from Nicholson). Sedate Sedan, Inc. uses robots and workers to assemble automobiles. There is a diminishing rate of technical substitution between robots and labour: robots do well at tasks that are purely repetitive, while labour does better at jobs that are less boring and require more thought. The various combinations of hours of robot use (r) and hours of labour use (1) needed to assemble sedans are described by the Cobb-Douglas production function: q = f(r,l) = ²√√√² 50 Note that marginal products for this production function are given by: MP: = 1 √r MP₁ Please make sure you know how to calculate them. This production function 100 Vi exhibits diminishing marginal products: the marginal product of robots decreases when more robots are used; the marginal product of labour decreases when more labour is used. The company can rent all the robots it wants for v = 40 dollars per hour and hire all the workers it wants at w = 40 dollars per…
Stuck on question for hours. Question in Image attachment. Thanks for your help :)
As distance to the city center increases, an office firm’s willingness to pay for space [increases / decreases / remains] at a(n) [increasing / decreasing / constant] rate.
A large architectural firm has just landed a contract to build a hospital. Seven architects currently work 40 hours per week in this firm, and all are available to work full-time on this project. The managers estimate that they need 400 architect-hours per week for 20 weeks to complete this project. Architects earn $500 per 40-hour week. Suppose that there is a fixed cost of hiring an architect of $2,000. (This cost reflects the advertising costs, interviewing costs, and so forth.) Part 2 The firm's current architects are willing to work overtime to complete this project if they receive 1.5 times their usual wage rate for any hours in excess of 40 hours per week. In this situation, the total overtime wages the managers would pay for the project will be $enter your response here.
3-5 Starbucks Starbucks is hoping to make use of its excess restaurant capacity in the evenings by experimenting with selling beer and wine. It speculates that the only additional costs are hiring more of the same sort of workers to cover the additional hours and costs of the new line of beverages. What hidden costs might emerge?