Suppose that in the year 2015, Oceanaire, Inc. planned to produce 525,000 units of its lightweight scuba tanks. Of the 525,000 it planned to produce, a total of 35,000 units would be added to the inventory at its new plant in Arizona. Also assume that these units have been selling at a price of $250 each and that the price has been constant over time. Suppose further that this year the firm built a new plant for $4 million and acquired $3.5 million worth of equipment. It had no other investment projects, and to avoid complications, assume no depreciation. Now suppose that at the end of the year, Oceanaire had produced 525,000 units but had only sold 485,000 units and that inventories now contained 40,000 units more than they had at the beginning of the year. At $250 each, that means that the firm added $10,000,000 in new inventory.

Suppose that in the year 2015, Oceanaire, Inc. planned to produce 525,000 units of its lightweight scuba tanks. Of the 525,000 it planned to produce, a total of 35,000 units would be added to the inventory at its new plant in Arizona. Also assume that these units have been selling at a price of $250 each and that the price has been constant over time. Suppose further that this year the firm built a new plant for $4 million and acquired $3.5 million worth of equipment. It had no other investment projects, and to avoid complications, assume no depreciation. Now suppose that at the end of the year, Oceanaire had produced 525,000 units but had only sold 485,000 units and that inventories now contained 40,000 units more than they had at the beginning of the year. At $250 each, that means that the firm added $10,000,000 in new inventory.

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

Dell Computer makes its suppliers wait 37 days on average to be paid for their goods; however, Dell is paid by its customers immediately. Thus, Dell earns interest on this float, the money that it is implicitly borrowing. If Dell can earn an annual interest rate of 4%, what is this float worth to Dell per dollar spent on inputs?
(Figure: Total Expenditures) As the price of the product rises from $0 to $40, what happens to total expenditures? Price $100 90- 80 70 60 50- 40- 30- 20 10 D 0 10 20 30 40 50 60 70 80 Quandty a. Total expenditures increase, reaching a maximum at a price of $40. b. Total expenditures remain unchanged. OcTotal expenditures first increase and then decrease, as price approaches the midpoint of the demand curve. d. Total expenditures decrease, reaching a minimum at a price of $40.
1) Helena earns $2000 this year and will earn $1500 the next year. The interest rate between each year is 10%. She wants to consume the same quantity each year. She wants to have spent all her money by the end of year 2. Warning: each question does build on each other a) How much would she save? How much would she consume? b) If she wins the lottery during the first year, raising her earnings to $10000 this year, how much would she save, how much would she consume? c) If she now wants to consume twice as much in year 1 as she does in year 2, how much would she save, how much would she consume? d) If she now has no preferences about her consumption, but she wants to save $5000 in year 1 (to buy a new car in year 2), how much would she consume in year 1 and year2?
Question 35 Suppose real estate analysts expect that 100,000 homes will be needed in a particular community by 2014. If the current number of homes in the community is only 50,000, we can expect to see a significant increase in the demand for investment. True O False
Suppose as a hypothetical scenario that you deposit $400 today into a savings account with a variable interest rate and will collect a payment in one year. True or False: If over the course of the year the interest rate falls, this increases the future value of your investment. True False
Assume that a loaf of bread cost $0.25 in 1950 and an equivalent loaf of bread cost $2.25 in 2000. Based on the cost of this loaf of bread, what is the value of a 1950-dollar in 2000-dollars?
(6, Katrina Decreases Labor Supply Consider the effects of a natural disaster like hurricane Katrina on a metropoli- tan economy. In the initial (prehurricane) equilibrium, total employment in the metropolitan area is 500,000 workers and the daily wage is $100. The price elasticity of supply of labor is 4.0 and the price elasticity of demand for labor is -1.0. Suppose the hurricane reduces labor supply (a horizontal shift of the supply curve) by 100,000 workers. a. Use a supply-demand graph of the urban labor market to show the effects of the hurricane. b. The equilibrium wage [increases, decreases] by percent (to $. computed as.... c. The equilibrium employment [increases, decreases] by workers), computed as.... (to d. The reduction in the equilibrium employment is [greater, less] than the ini tial decrease in labor supply because. ... percent
Let's assume that prices substantially increased over the past year. How do you expect this will affect people's buying behavior? Be sure to tie this back to economic concepts discussed in this course. Time Atten 33 M.
Suppose that your business has an opportunity to buy a machine that produces widgets. The machine can produce 13,500 widgets per year that you can sell for a profit of $1.60 per widget. With proper maintenance, the machine can run indefinitely. You decide that your minimum annual rate of return for any investment is 12 percent. What is the maximum price you would be willing to pay for the machine? Instructions: Round your answer to the nearest dollar. Maximum price =
Suppose the U.S. economy was at trend and now benefits from a boom in Asia, which raises de by 0.015. All other demand parameters remain unchanged. In order to maintain Y₁ = 0, the Federal Reserve raises the real interest rate R by 0.6 percentage point. Based on this information you know that b =
Patience has a utility function 1/2 1/2 U(cl, c2) = c? + 0.80c/? where c is her consumption in period 1 and c is her consumption in period 2. Her income in period 1 is 3 times as large as her income in period 2. At what interest rate will she choose to consume the same amount in period 1 as in period 2? a. 2 b. 0.13 c. 0.25 d. 0 е. О.38 20% 13% 25% 0%