1) A firm using Managerial Economics evaluation tools finds that the 2-inputs in its 2- input production arrangement is inefficient. Describe how that inefficiency is manifested in terms of the inputs and briefly discuss the choice the firm faces with regard to outputs OR its budgetary outlays devoted to production.
2) Franco listens only to Symphonic music or Dolly Parton. Franco purchases 12 Symphonic music downloads and 24 downloads by Dolly Parton per month. He would forgo downloads by Dolly for the Symphonic downloads at the rate of 3:1 whenever he has more Dolly units than Symphonic ones. But he would forego only 1 unit by Dolly per Symphonic music unit when the opposite is true. If you somehow took away 18 of his Dolly tunes next month, how many Symphonic music tunes would he need to remain at the same satisfaction level? Be sure to show your work.
3) Describe the effect of each of the following events on either the demand or supply of gasoline in the USA. Further indicate the likely direction in the amount of gasoline exchanged AND the expected market price (both) when: a. domestic incomes rise b. the price of natural gas rises c. A new oil field is discovered and put into service. d. The average price of automobiles declines
4) A custodial company estimates that each cleaning job adds $20 to total costs. The firmâs demand is given by the equation below. Estimated demand equation: Q = 50,000 â 1,000P She also calculates marginal revenue from this relationship. a. What is the optimal level.of output? b. In order to sell the amount computed in part (a) above; at what price would the company have to offer its service? c. If fixed costs are $45,000, what is this firmâs total profit at the optimum price/output combination? (show your work)
5) A recent study indicates that the long-run average cost curve for cellular telecom companies is basically flat. What do you expect to happen to industry output and costs per subscriber if the number of cellular providers were reduced (assuming the costing finding is true)? Why?
1) A firm using Managerial Economics evaluation tools finds that the 2-inputs in its 2- input production arrangement is inefficient. Describe how that inefficiency is manifested in terms of the inputs and briefly discuss the choice the firm faces with regard to outputs OR its budgetary outlays devoted to production.
2) Franco listens only to Symphonic music or Dolly Parton. Franco purchases 12 Symphonic music downloads and 24 downloads by Dolly Parton per month. He would forgo downloads by Dolly for the Symphonic downloads at the rate of 3:1 whenever he has more Dolly units than Symphonic ones. But he would forego only 1 unit by Dolly per Symphonic music unit when the opposite is true. If you somehow took away 18 of his Dolly tunes next month, how many Symphonic music tunes would he need to remain at the same satisfaction level? Be sure to show your work.
3) Describe the effect of each of the following events on either the demand or supply of gasoline in the USA. Further indicate the likely direction in the amount of gasoline exchanged AND the expected market price (both) when: a. domestic incomes rise b. the price of natural gas rises c. A new oil field is discovered and put into service. d. The average price of automobiles declines
4) A custodial company estimates that each cleaning job adds $20 to total costs. The firmâs demand is given by the equation below. Estimated demand equation: Q = 50,000 â 1,000P She also calculates marginal revenue from this relationship. a. What is the optimal level.of output? b. In order to sell the amount computed in part (a) above; at what price would the company have to offer its service? c. If fixed costs are $45,000, what is this firmâs total profit at the optimum price/output combination? (show your work)
5) A recent study indicates that the long-run average cost curve for cellular telecom companies is basically flat. What do you expect to happen to industry output and costs per subscriber if the number of cellular providers were reduced (assuming the costing finding is true)? Why?
