Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 3, Problem 4DQ
To determine
The cost incurred when the project is abandoned.
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an American multinational that sells consumer electronic products, has manufacturing facilities in three countries: Brazil, Thailand, and Canada. The average hourly wage rate, output per worker, and annual overhead cost for each location are as follows:
Given the above figures, is Storm currently allocating its production resources optimally? If not, what should it do? Justify your answer. Now, suppose that Storm is planning to consolidate all its manufacturing into one facility. Where should it locate? Justify your answer.
ExxonMobil runs two oil refinery plants, one in Indonesia and the
other in Malaysia. The total cost function of the Indonesian plant is
TC₁ =Q and the total cost function of the Malaysian plant is
TC2=2Q2. If 5 units of refined oil are produced while
minimizing total cost, what is the optimal production at each plant?
O Indonesia 1, Malaysia=4
O Indonesia=0, Malaysia=5
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O Indonesia=3, Malaysia=2
Indonesia 4, Malaysia=1
You are analyzing a new company’s records projecting their profits using a marginal profit function, P′(x), where P is profit, in thousands of dollars, and x is the number of items they sell, in hundreds. the integral is from 5 to 1 for P ′(x) dx = 22. If the company projects to earn $26,000 of profit from selling 500 items and $7000 of that revenue from selling 100 items, what is their projected cost from selling 100 items?
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