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Advanced Engineering Mathematics
10th Edition
ISBN: 9780470458365
Author: Erwin Kreyszig
Publisher: Wiley, John & Sons, Incorporated
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Suppose that a company has determined that a 70% experience curve accurately describes the evolution of its production costs for a new line. If the first unit costs $100 to produce, what should the 1,000th unit cost based on the experience curve?
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- In economics, utility is a measure of satisfaction or usefulness. The utility of wealth could therefore be thought of as how happy you are as a function of the amount of wealth you possess. When applied to economic measurements, the word "marginal" describes the change corresponding to an increase in the measured quantity. The marginal utility of wealth is how much your happiness increases as your wealth increases. The Law of Diminishing Marginal Utility states that as you consume more, your marginal utility decreases; that is, the more you have of something, the smaller the impact getting more of it affects your happiness. If w is your wealth, and T(w) is your utility of wealth, your marginal utility of wealth at w is M(w) = lim h→0 T(w+h)-T(w) h and the rate at which your marginal utility of wealth is changing at w is M (w+h) — M(w) h C(w) = lim h→0 Suppose w is measured in 10s of thousands of dollars, and T(w) wealth. - 300w w + 1 is the utility of your (a) Find a closed form…arrow_forwardComplete the following sentence: In a linear cost function, the marginal cost is the --- abstract additional fixed cost per item.arrow_forwardLet’s assume that in Kansas, a family farmer sells wheat in a perfectly competitive market. After increasing the production of wheat from 220 bushels to 240 bushels, the total revenue of the farmer increases from $6,600 to $6,700. What was the marginal revenue of this increase in production in dollar?arrow_forward
- A surfboard manufacturer lost $500,000 last year during a recession. Total revenue was $5,000,000 and total variable costs were 40% of sales. The production facility ran at 50% capacity. The production manager wants to know the following: a. What is the percent capacity required to break even? b. When the economy recovers this year, if the plant runs at 100% capacity what net income could the company realize? c. There is a possibility that sales could be so strong this year that the plant may be required to run at 120% capacity by offering a lot of overtime to its production workers. This would result in total variable costs rising by 35%. On a strictly financial basis, should the production manager plan to exceed capacity or should he advise top management to freeze production at 100% capacity? Justify your answer. Answer Solution- 9a. 58.3% 9b. $2,500,000 9c. $3,100,000arrow_forwardA certain company grants a six-month investment product that offers to pay its clients 8% the first month, 12% the second month, 11% the third month, 8% the fourth month, 14% the fifth month and 15% the sixth month. What would be the value of the average rate that the customer will receive? Write your answer to 2 decimal places.arrow_forwardThere is a power plant that charges 10 cents per kilowatt hour for electricity and produces 1,000 tonnes of emissions annually. If this power plant were to reduce their annual emissions by 1 tonne it would cost them $250. What would be the marginal cost for this power plant? a. $25 b. $100 c. $250 d. $500arrow_forward
- 2. You bought a new computer for $2,500. Four years later, your computer is valued at $1,250. a. Assume that the cost function will be linear and write a linear function to describe the cost of the computer ?t years after you bought it. b. Assume that the cost function will be exponential (think of exponential decay) and write an exponential function to describe the cost of the computer ?t years after you bought it. c. For each function you just wrote, find the rate at which the cost is depreciating 3 years after you bought it. d. Which function do you think would be more accurate? Write a complete sentence or two describing why you think so.arrow_forwardShow graphically and explain how large government budget deficits “crowd out” private investmentarrow_forwardThe answer for step 4, the calculation of Marginal cost, revenue, and profit when 50 units are sold was cut off. Would you please resubmit the answer, I hope I don't get charged for this question.arrow_forward
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