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 2, Problem 7DQ
To determine
The product variation and profit maximization.
Expert Solution & Answer
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With current technology, suppose a firm is producing 400 loaves of banana bread dally. Also assume that the least-cost combination of
resources for producing those loaves is 10 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at
prices of $20, $60, $60, and $20, respectively. Assume the firm can sell these 400 loaves at $2 per unit.
Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in
front of those numbers.
What is the firm's total revenue?
What is its total cost?
Calculate the amount of economic profit or loss.
will R continue to produce banana bread?
IClen to select
If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?
IClick to selectt
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate.
Hours Needed Amount Produced
To Make 1
in 40 Hours
mixer toaster
8 5
10
mixers
5
2
toasters
8
4
Maya
Miguel ?
Maya should specialize in the production of
O a. mixers and Miguel should specialize in the production of toasters.
O b. toasters and Miguel should specialize in the production of mixers.
O c. neither good and Miguel should specialize in the production of both goods.
O d. both goods and Miguel should specialize in the production of neither good.
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?
Chapter 2 Solutions
Microeconomics
Ch. 2.2 - Prob. 1QQCh. 2.2 - Prob. 2QQCh. 2.2 - Prob. 3QQCh. 2.2 - Prob. 4QQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQ
Ch. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4P
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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, 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?arrow_forwardSuppose that Samsung’s production costs are the same in both China and India. Also suppose that Samsung can produce cell phones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones. If customers in India demand 100 million phones and customers in China demand 200 million phones, Samsung’s lowest-cost option is to A. produce 150 million phones in India for Indian demand and 50 million to export to China and produce 150 million phones in China for Chinese demand. B. produce 100 million phones in India for Indian demand and produce 200 million phones in China for Chinese demand. C. produce phones only in India and export phones to China. D. produce phones only in China and export phones to India.arrow_forwardUsing the following table with the resources and their cost per unit, which production choice would a business decide to use? $100 $30 $20 Cost per unit Capital Labor Land Production 2 1 2 choice 1 Production 1 5 2 choice 2 Production 2 4 3 choice 3 Production choice 2 Production choice 3 Production choice 1 LOarrow_forward
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