ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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This is a repeated question since you guys only answerone question at a time!
Let's assume that a firm's total weekly costs are as follows: 1. Salaries = $2,600. 2. Supplies = $400. 3. Rent = $800.
In addition, the owners have invested their own money into the business. This could have earned them interest of $150 per week if they had chosen to put it into a bank instead of investing it into their business. If the firm has weekly revenue of $4,000, what are the firm's accounting profit and economic profit? Show your work please.
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- Until recently, Mark worked as a financial advisor, earning $65,000 annually. Then he inherited a piece of commercial real estate that had been renting for $14,000 annually. Mark decided to leave his job and operate a sea food restaurant in the space he inherited. At the end of the first year, his books showed total revenues of $300,000, and paid a total cost of $200,000 for food, utilities, cooks, and other supplies: Show all your work including formulas learned to support your answer for each of the following: A) Calculate his explicit costs: B) Calculate his implicit costs. C) Calculate his accounting profits. D) Calculate his economic profits.arrow_forwardif economic profit equals accounting profit, what do implicit cost equal?arrow_forwardRefer to the table below. Note that the first column shows variable costs. Quantity Cost 0 1 2 3 5 6 (in dollars) Costs 0 15 35 60 90 Fixed Total Average Costs Total Costs (in (in (in dollars dollars) per unit) dollars) 160 40 40 40 55 55 : 40 75 37.5 40 100 125 40 33.3 40 130 32.5 165 33 40 200 33.3 Average Variable Costs (in dollars per unit) 15 17.5 20 22.5 25 26.6 Marginal Costs (in dollars per unit) 15 20 25 30 35 40 If the firm produces 5 units that it sells at a price of $30.00 each, what will its profits or losses equal? losses equal $15 profts equal $15 profts equal $25 losses equal $25arrow_forward
- 1200 100.0 20.0 F20 100 -100 A company produces school buses. The graphs of the Cost function (red) and the Revenue function (blue) are given on the figure. (You may click on the figure to see a bigger version.) The horizontal axes represents quantity in number of units. Cost and Revenue are measured in thousands of dollars. Answer the following questions. 1. What are the fixed costs? Answer: thousand dollars. 2. Suppose the current level of production is 19 buses. Should the company produce 20 th bus? Answer "yes" or "no" 3. Between 0 and 100, approximately what level of production maximizes the profit? (Or minimizes the losses if the company doesn't make any profit). Answer:arrow_forwardplease pick an example of three types of costs that a business can incur and briefly explain whether or not they are fixed, variable or a combination of the two. Make sure that you are clear in your description and explanation.arrow_forwardA student once said she 'didn't believe in sunk costs. She meant that the idea that 'some costs are sunk and shouldn't be accounted for in making decisions' didn't make sense and that all costs associated with a project were important. Do you think the concept of sunk costs is important to business decision-making? Why or why not?arrow_forward
- What is the difference between economic profit and accounting profit? What is a normal rate of return and how does normal, less than normal, greater than normal inform resource allocation?arrow_forwardCan you please solve question # 14arrow_forwardFirms are facing a lot of challenges when dealing with their costs of production. Analyze a fixed and variable cost in a fast food restaurant and how this cost will impact their operations when their business starts to grow.arrow_forward
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