Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 19, Problem 5DQ
To determine
Availability of resource.
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Suppose, under license from Apple, a factory in China buys all the components for an iPhone from multiple manufacturers for $150 They assemble the iPhone and
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Suppose that you own a 10-acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. If the price at which wheat can be sold is $5 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 10 acres? What if the price of wheat rose to $6 per bushel?
With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the firm can sell these 400 loaves at $2 per unit, what is its total revenue? Its total cost? Its profit or loss? Will it continue to produce banana bread? If this firm’s situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?
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- With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also, assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the firm can sell these 400 loaves at $2 per unit, will it continue to produce banana bread? If this firm’s situation is typical for the other makers of banana bread, will resources flow to or away from this bakery good?arrow_forwardWith current technology, suppose a fifirm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. If the fifirm can sell these 400 loaves at $2 per unit, will it continue to produce banana bread? If this fifirm’s situation is typical for the other makers of banana bread, will resources flow to or away from this bakery good?arrow_forwardThe figure below shows the market for large bags of potato chips. Market for Potato Chips in large bag units Price ($) 7 LO LO 5 3 2 1 0 10 20 30 40 50 60 70 80 90 100110120 S Darrow_forward
- With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $ 40, $60, $60, and $20, respectively. Assume the firm can sell these 400 loaves at $ 2 per unit. 1). What is its total revenue? 2). What is its total cost? 3). What is the firm's profit or loss? The firm generates an economic ( choose one -a) loss, b) profit ) of...? 4). Will it continue to produce banana bread? ( Yes or No) 5). If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?arrow_forwardAssume that your company produces two goods: laptops and tablets. Assume aslo that your company has limited resources( including time) to devote to producing these items. Now assume that the laptop team does something to improve the efficiency of making laptops, while the tabley holds to old methods. Given the change you can a) only increase your production of laptops b) only increase your production of tablets c) increase production of both items d) not increase your production in either tablets or laptops.arrow_forward2 B agriculture Here's a production possibility frontier graph. In this example.... At point E, approximately what is the cost of another unit of industry? O6 units of agriculture O 4 units of agriculture 9 10 11 O2 units of agriculture O 1 unit of agriculture O 0 units of agriculturearrow_forward
- 4. Suppose that you are an airline executive and you come to work one morning to find a memorandum on our desk indicating that the Boeing 747 that your company leased to fly between New York and London is bringing in revenues of $200,000 per day. You also know that the direct operating expenses (wages for the flight crew, aviation fuel, and that awful airline food) are $180,000 per day. Lastly, suppose you calculate that the interest cost of the loan to pay for the airplane was $40,000 per day. Should you continue to fly the plane? Why might your answer depend on the decision time frame, and what additional information would you need?arrow_forwardC 04:50 7:01 PM 23.7KB/s O L A 9ll (51) Chegg = Chegg Econon Time remaining: 00:09:54 The opportunity cost of production is zero O outside (to the right of) the production possibilities frontier. O inside the production possibilities frontier. O when all resources are used to produce only one of the two goods. O on the production possibilities frontier. fiproduction possibilities frontier has a 'bowed outward' shape only when: O As the quantity of one good produced increases, the opportunity cost of producing that good also increases. O an economy is self-sufficient instead of interdependent and engaged in trade. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. O the rate of tradeoff between the two goods being produced is constant. 2arrow_forward* CENGAGE MINDTAP Critical Analysis Questions (Ch 11) Back to Assignment Attempts Keep the Highest /3 6. Critical analysis Q13 Gouge-em Cable Company is the only cable television service company licensed to operate in Backwater County. Most of its costs are access fees and maintenance expenses. These fixed costs total $100,000 monthly. The marginal cost of adding another subscriber to its system is constant at $4 per month. Gouge-em's demand curve can be determined from the data in the accompanying table. Complete the following table by computing the total revenue, total cost, and profit at each of the various subscription prices. Number of Subscribers Total Revenue Fixed Cost Total Cost Profit Subscription Price (Thousands Per Month) ($, Thousands) (S, Thousands) (S, Thousands) (S, Thousands) $25 20 $100 20 40 $100 15 IS $100 60 10 80 $100 100 $100 IS 150 15A $100 thousand. Gouge-em will charge v for its cable services, earning them a profit of $ $1 Now suppose the Back unty Public…arrow_forward
- A life-insurance salesman spends 12 hours a week on the telephone soliciting new clients. From past experience, the salesman estimates that each hour spent calling students, blue-collar workers, and professionals will produce the following number of additional sales: Hours Calling 0 1 2 3 4 LO 5 6 Number of Additional Sales Blue-Collar Workers 0 19 17 15 14 12 11 Students 0 25 22 19 17 15 12 Professionals 0 21 19 17 15 12 11 How should the life-insurance salesman allocate his phone-calling time to maximize the number of sales? Hours spent calling students = Hours spent calling blue-collar workers = Hours spent calling professionalsarrow_forwardSuppose there exist two imaginary countries, Yosemite and Sequoia. Their labor forces are each capable of supplying four million hours per day that can be used to produce pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be produced by one hour of labor. Country Yosemite Sequoia Pistachios (Pounds per hour of labor) 8 LO 5 Chinos (Pairs per hour of labor) 16 20arrow_forward-- 49. Table 11-4 There are four homes along Belmont Circle, which surrounds a small plot of land. The land currently has no trees, and the 4 homeowners - Adams, Benitez, Chen, and Davis -- are considering the idea of contributing to a pool of money that will be used to plant up to 4 trees. The table represents their willingness to pay, that is, the maximum amount that each homeowner is willing to contribute toward each tree. Adams Chen $100 First tree Second tree Third tree Fourth tree A. 3 B. 2 C. 1 50 D. 4 20 10 Benitez $115 110 100 50 $120 110 80 40 Davis $90 Refer to Table 11-4. Suppose the cost to plant each tree is $90. How many trees should be planted to maximize the total surplus of the four homeowners? 50 30 Oarrow_forward
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