In the given scenario; if Company A determined that marginal revenue (MR) is greater than marginal cost (MC) the action that they should take to reach profit maximization is to continue manufacturing additional units of widgets until the marginal revenue is equal to marginal cost. Using the information provided in the data table, when firm has reached the output quantity of seven widgets their marginal revenue is still larger than their marginal cost by twenty dollars. As a result of increasing the quantity of widgets produced to eight the marginal revenue and marginal cost are now equal to zero therefore maximizing Company A’s
Ensure you state where a particular assumption is used in your proof. (600 points) [pic] Given the two IC Curves, Point A on IC1 is northeast of IC2’s Point B implying that IC1 is has a higher utility than IC2. On IC2, Point D is northeast to IC1’s Point C implying that IC2 is the IC curve with the higher utility, which creates a logical inconsistency. This would break the assumption rule that every consumption basket lies on one and only one indifference curve. It would also break the transitivity assumption.
The alternative hypothesis H1 is that the mean annual income μ is less than $50,000. H1:μ < $50,000 Significance level chosen is 5% or α = 0.05 Here, the population standard deviation is unknown. Hence, we use a t statistic Therefore the test statistic used is t = X-μS/n follows a t distribution with n-1 degrees of freedom From the t table corresponding to 0.05 probability, the critical value tα =1.6766. Hence the critical region is t < -1.6766. Alternatively, we reject the null hypothesis, if the p value is less than the significance level Substituting the value we get t = 43.74-5014.6396/50 = -3.02 The p value corresponding to t = -3.02 and 49 d.f.
Answer: The paradox of value - is value of a good with a lower price but with a high value and a good with higher price with lower value. Paradox value is resolved by distinguishing between total utility and marginal utility. 12. What are the similarities between utility and temperature? Answer: They are both abstract concepts.
There is a very low probability (5% at most) that the annual income for the data from AJ DAVIS is less than $50,000. The way that we concluded this was to test the probability that the annual income of our customers is $50,000 versus the probability that the average annual income was less than $50,000. What we found was that there is a 95% chance that the average annual income of our customers is between $69,997.9 and $70,001.8. This was also backed with a p-value (which determines the strength of the evidence) that showed weak evidence against the average income equaling $50,000. Since we cannot deny that the annual income average is $50,000, we have no choice but to keep it as a consideration moving forward.
EGT-1 TASK 1 According to McConnell and Brue Marginal revenue constitutes the difference in total revenue incurred by the sale of one additional unit. So marginal revenue is calculated by dividing the change in total revenue by the change in quantity sold, which is calculated as the change in TR/ the difference in Q (McConnell & Brue, 2008). The connection in marginal revenue and total revenue is based entirely on mathematics. The computation total revenue=price x quantity is the formula used to determine total revenue. Marginal cost as stated by McConnell and Brue is said to be the extra cost of producing 1 more unit of product; so the calculation for marginal cost MC is the change in total cost TC divided by the change in total
Question 2 (Objective 3f) – You are using the break-even analysis to decide whether to make or buy a small metal part used in your product. The variable costs are $10 to buy and $5 to make. The fixed costs are $2000 to buy and $22,000 to make. Therefore, you should: a) Buy the part if volumes are expected to be greater than 4000 b) Buy the part if volumes are expected to be greater than 3000 c) Make the part if volumes are expected to be greater than 4000 d) Make the part if volumes are expected to be greater than 3000 Question 3 (Objective 3a) - The goals of a purchasing organization include: a) Reducing total cost b) Ensuring raw materials are on hand when they are needed c) Reducing price only d) All the above e) A and B only Question 4 (Objective 3b) - A buyer received a materials requisition for a new part. What should the buyer do next?
(p. 191) ______________ theory is typically associated with greater profits. a. Signaling b. Compensating wage differentials C. Efficiency wage d. Human capital 4. (p. 193) Implications of _______________ theory are that pay level affects an employer's ability to recruit.
Discuss surplus-enhancing transactions in markets 6. Explain how elasticity affects the way in which the burden of a per-unit tax is shared between buyers and sellers 7. Explain how elasticity affects the size of the deadweight loss created by a per-unit tax **NOTE: All of chapter 5 of Hubbard, Garnett, Lewis and O’Brien (2011) Microeconomics, 2nd edition, Pearson is required reading. 1. Consumer surplus The difference between the highest price a consumer is willing to pay for a good or service, and the price they actually pay.
Outlays are securities that are used to make purchases; or to improve an asset that is already held and that will increase the value of Caledonia Products for a length of time. Caledonia Products has allocated $100,000.00 to get production started for the company; $7,900,000.00 to purchase a new operating facility along with equipment. The cost of equipment and plant, plus shipping and installation charges, plus net working capital equals a project’s initial outlay. The cost for shipping and installation is an additional $100,000.00 resulting in $8,100,000.00 in initial cash flow. These are the main examples of capital outlay.