MICROECONOMICS-ACCESS CARD <CUSTOM>
11th Edition
ISBN: 9781266285097
Author: Colander
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 8QE
(a)
To determine
Determine the table value of total cost and average total cost.
(b)
To determine
Explain whether the production of fake whales exhibits economies of scale, diseconomies of scale, or constant returns to scale.
(c)
To determine
Explain the fixed cost of producing fake whales.
(d)
To determine
Explain the variable cost of producing fake whales.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Sea lions have been depleting the stock of steelhead trout. One idea to scare sea lions off the Washington state coast was to launch fake killer whales, predators of sea lions. The cost of making the first whale is $25,000—$7,000 for materials and $18,000 for the mold. The mold can be reused to make additional whales, so additional whales would cost $7,000 apiece.a. Calculate the total cost and average total cost of producing 1 to 10 fake killer whales by filling in the table below.Instructions: Enter your responses rounded to the nearest whole number.
Quantity
Total Costsof Mold ($)
Total Costsof Materials ($)
Total Costs($)
Average Total Costs ($)
1
18,000
7,000
25,000
2
3
4
5
6
7
8
9
10
b. Does production of fake whales exhibit diseconomies of scale, economies of scale, or constant returns to scale?
Diseconomies of scale
Constant returns to scale
Economies of…
Given that the Suez Canal might be blocked, the only alternate sea route to Europe (from China) is sailing around the Cape of Good Hope. This route is approximately 3.600 miles (nautical) longer than the Suez Canal route, and takes about 9 days at typical 16.5 knots (mph).
List the factors (as many as you can think of) affecting the cost of transporting cargo by sea and guess their weight (importance) on the total cost.
What change in the factors above would affect the optimal sailing speed?
In recent years, the United States has experienced large increases in oil production due in large part to a
new technology, hydraulic fracturing ("fracking"). Fracking involves injecting a mixture of water, sand, and
chemicals into rock formations at high pressure to release oil and natural gas. An article in the Wall Street
Journalindicates that economies of scale in fracking may be considerably smaller than in conventional oil
drilling. If this view is correct, what would the likely consequences be for the number of firms drilling for oil
in the United States?
Chapter 12 Solutions
MICROECONOMICS-ACCESS CARD <CUSTOM>
Ch. 12.1 - Prob. 1QCh. 12.1 - Prob. 2QCh. 12.1 - Prob. 3QCh. 12.1 - Prob. 4QCh. 12.1 - Prob. 5QCh. 12.1 - Prob. 6QCh. 12.1 - Prob. 7QCh. 12.1 - Prob. 8QCh. 12.1 - Prob. 9QCh. 12.1 - Prob. 10Q
Ch. 12.A - Prob. 1QECh. 12.A - Prob. 2QECh. 12.A - Prob. 3QECh. 12.A - Prob. 4QECh. 12.A - Prob. 5QECh. 12.A - Prob. 6QECh. 12.A - Prob. 7QECh. 12 - Prob. 1QECh. 12 - Prob. 2QECh. 12 - Prob. 3QECh. 12 - Prob. 4QECh. 12 - Prob. 5QECh. 12 - Prob. 6QECh. 12 - Prob. 7QECh. 12 - Prob. 8QECh. 12 - Prob. 9QECh. 12 - Prob. 10QECh. 12 - Prob. 11QECh. 12 - Prob. 12QECh. 12 - Prob. 13QECh. 12 - Prob. 14QECh. 12 - Prob. 15QECh. 12 - Prob. 16QECh. 12 - Prob. 17QECh. 12 - Prob. 1QAPCh. 12 - Prob. 2QAPCh. 12 - Prob. 3QAPCh. 12 - Prob. 4QAPCh. 12 - Prob. 5QAPCh. 12 - Prob. 1IPCh. 12 - Prob. 2IPCh. 12 - Prob. 3IPCh. 12 - Prob. 4IPCh. 12 - Prob. 5IPCh. 12 - Prob. 6IP
Knowledge Booster
Similar questions
- relationship between marginal and average costs Consider the following scenario to understand the relationship between marginal and average values. Suppose Raphael is a professional basketball player, and his game log for free throws can be summarized in the following table. Fill in the columns with Raphael's free-throw percentage for each game and his overall free-throw average after each game. Game Game Result Total Game Free-Throw Percentage 1 4/5 4/5 80 2 2/5 6/10 3 1/4 7/14 4 1/2 8/16 5 4/4 12/20 Average Free-Throw Percentage 80 On the following graph, use the orange points (square symbol) to plot Raphael's free-throw percentage for each game individually, and use the green points (triangle symbol) to plot his overall average free-throw percentage after each game. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. FREE-THROW PERCENTAGE 100 90 80 70 60 50 40 30 20 10 0 0 1 2 3 5 GAME Game Free-Throw…arrow_forwardHelp me pleasearrow_forwardThe table below shows Lanark's production possibilities. Wheat Cars A 0 95 B 90 90 C 158 81 204 63 226 F 235 36 a. If Lanark is producing 72 cars, it can produce approximately b. If Lanark is currently producing combination C, the cost of 46 more wheat is (Click to select) c. If Lanark is currently producing combination D, the approximate per unit cost of an additional car is necessary, round your answers to 1 decimal place. Remember to round 0.05 up to 0.10. wheat. (Click to select). Ifarrow_forward
- A movie theater shows films for a community of 10000 people. Right now, the price per ticket is $17.50. In the past, when they increased or decreased the price per ticket, they discovered that for every dollar (or fraction) that the price was increased or decreased, the attendance decreased or increased proportionally by 200 people. The theater owner pays the Film Distribution Company $10 (incremental cost) in royalties per person whoviews the film. Find a. The willingness to pay distribution of the movie goers. b. The average price they would be willing to pay. c. The price per ticket that maximizes revenue. d. Should the theater owner increase or decrease the price per ticket if she wants to maximize contribution? e. Find the consumer surplus if the tickets are priced at the price that maximizes contribution. Please complete in excel showing formulas on how it was completedarrow_forwardAnswer to this Q?arrow_forwardIn recent years, the United States has experienced large increases in oil production due in large part to a new technology, hydraulic fracturing ("fracking"). Fracking involves injecting a mixture of water, sand, and chemicals into rock formations at high pressure to release oil and natural gas. An article in the Wall Street Journal indicates that economies of scale in fracking may be considerably smaller than in conventional oil drilling. If this view is cor- rect, what would the likely consequences be for the num- ber of firms drilling for oil in the United States?arrow_forward
- 1 01:45:16 The table below shows Lanark's production possibilities. Wheat Cars A 20 B 15 19 C 26 17 D 34 13 E 37 7 F 38 0 a. If Lanark is producing 15 cars, it can produce approximately b. If Lanark is currently producing combination C, the cost of 8 more wheat is c. If Lanark is currently producing combination D, the approximate per unit cost of an additional car is necessary, round your answers to 1 decimal place. Remember to round 0.05 up to 0.10. wheat. (Click to select) ✓ (Click to select). Iarrow_forwardRefer to the figure. What is the marginal cost of the 15th hour spent on this activity? (Round to the nearest tenth) Total Cost E b n Z a=122 b= 82 c=56 x=9 y = 15 z = 19 Hoursarrow_forwardIn choosing a production technology, how will firms react if one input becomes relatively more expensive?arrow_forward
- Back to Assignment Attempts: Keep the Highest: 1/4 3. The relationship between marginal and average costs Consider the following scenario to understand the relationship between marginal and average values. Suppose Edison is a professional basketball player, and his game log for free throws can be summarized in the following table. Fill in the columns with Edison's free-throw percentage for each game and his overall free-throw average after each game. Game Game Result Total Game Free-Throw Percentage Average Free-Throw Percentage 3/3 3/3 100 100 3/5 6/8 80 3 2/8 8/16 4 2/4 10/20 5/5 15/25 On the following graph, use the orange points (square symbol) to plot Edison's free-throw percentage for each game individually, and use the green points (triangle symbol) to plot his overall average free-throw percentage after each game. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 100 Tarrow_forwardA restaurant frequently offers a special prix fixe meal and has been charging $120 per person for the event. At that price, they’ve been averaging 40 customers each time. Their marketing firm has convinced them that they’ll gain a customer for every dollar they lower the cost of the event, and conversely lose a customer for every dollar they raise the cost. Their fixed cost per event is $$1200 and preparing each customer’s meal costs an additional $30. What are the break-even points in terms of customers served? Write the exact answer. Do not round. Separate multiple answers with a comma.arrow_forwardAccording to one estimate, the parts for a Segway Human Transporter-which has five gyroscopes, two tilt sensors, dual redundant motors, 10 microprocessors, and can travel up to 12.5 mph-cost at least $1,500 (Eric A. Taub, "Segway Transporter Slow to Catch On," San Francisco Chronicle, August 11, 2003: E4). Suppose that Segway's marginal cost is $1700, and the price of a Segway is $5500. What is the firm's price/marginal cost ratio? The price to marginal cost ratio is (round your answer to two decimal places) What is its Lerner Index? Its Lerner Index is (round your answer to two decimal places) What is the elasticity of demand it believes it faces (assuming that it is trying to maximize its short-run profit)? The price elasticity of demand is . (round your answer to two decimal places) étv 20 MacBook Air DI F4 F5 F3 & 23 2$ 7 8 9 - 3 4 5 { P W E R D F G J K L > C V M command option .. .- Barrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning