Five mutually exclusive cost alternatives that have infinite lives are under consideration for decreasing the fruit-bruising rates of a thin skin-fruit grading and packing operation (peaches, pears, apricots, etc.). The initial costs and cash flows of each alternative are available. If the MARR is 15% per year, the one alternative to select is:
Alternative | A | B | C | D | E |
Initial cost, $ | −15,000 | −12,000 | −9,000 | −14,000 | −11,000 |
Cash flow, $ per year |
−300 | −900 | −1400 | −700 | −1000 |
A |
||
B |
||
D |
||
E |
In: Economics
Suppose that two identical firms produce widgets and that they are the only firms in the market. Their costs are given by
C1=60Q1
and
C2=60Q2
where
Q1 is the output of Firm 1 and Q2 is the output of Firm 2. Price is determined by the following demand curve:
P=2700−Q where Q=Q1+Q2
Find the Cournot-Nash equilibrium. Calculate the profit of each firm at this equilibrium. (For all of the following, enter a numeric response rounded to two decimal places.)
When competing, each firm will produce ___ units of output.
In turn, each firm will earn profit of ___.
Suppose the two firms form a cartel to maximize joint profits. How many widgets will be produced? Calculate each firm's profit.
Each firm will produce ___ units of output.
In turn, each firm will earn profit of ___.
Suppose Firm 1 were the only firm in the industry. How would market output and Firm 1's profit differ from that found in above?
Firm 1 would produce ___ units of output.
Firm 1's would earn profit of ___.
Returning to the duopoly above, suppose Firm 1 abides by the agreement but Firm 2 cheats by increasing production. How many widgets will firm produce? What will be each firm's profits?
Firm 2 would cheat by producing ___ units of output.
As a consequence, Firm 1 would earn profit of ___.
Firm 2 would earn profit of ___.
In: Economics
The Covid-19 pandemic creates opportunities and threats for practically every business in every industry. What strategic approach should a company pursue when dealing with a Black Swan event such as this? Why? While all companies have different criteria regarding the specific strategic decisions that will be made, ethical decisions are also very relevant and should be more consistent across industries and companies. Indeed, in many cases ethical decisions are likely the most important as the heath of employees, customers, and their families are at risk. If you were the CEO of a non-essential retail business, how would you handle the current crisis? Assume that simply shutting down the business for over 30 days would place the company at serious risk of bankruptcy.
In: Economics
Two students debate about the realism of economic assumptions. Donald is an economics student and Boris is a sociology student. They argue about a key assumption in the labor supply model: leisure is a good (more leisure is preferred to less leisure). Boris argues that some people enjoy work, therefore hours of work is not a bad and the labor supply model is not applicable to these people. Donald argues that that even if these people enjoy work, the labor supply model is still applicable if the marginal utility of leisure if larger than the marginal utility of work. Who is correct? Explain.
In: Economics
Assume that the labor market is competitive, where the labor demand curve is strictly downward sloping and the labor supply curve is strictly upward sloping.
(a) Suppose the government imposes a minimum wage on this labor market. Why would the minimum wage cause a deadweight loss (welfare loss)? In what sense is it a loss?
(b) How does the deadweight loss depend on the elasticities of the demand and supply curves? Explain.
(c) If the minimum wage created a deadweight loss, why would the government impose it? Discuss.
In: Economics
Question 1
a) Using graphs and explaining the mechanisms, determine the equilibrium in an open economy using the model of the market of loanable funds and foreign currency exchange. Discuss how the interest rate, r, and the exchange rate, e, are determined.
b) In the above, what happens when the government runs a budget deficit?
c) In question (a), what happens if the government decides to implement an import quota? Briefly explain why a government would implement such a trade policy.
d) Explain, using graphs, how the political instability in Mexico in 1994 lead to capital flights
In: Economics
A plasma arc furnace is being considered for the incineration of medical wastes at a public hospital. The initial investment is $3,000,000 and annual revenues are expected to be $1,800,000 over the six-year life of the furnace. Annual expenses will be $1,000,000 at the end of year one. The salvage value of the furnace after six years is $700,000. Assume MARR is 10%.
What is the Internal Rate of Return (IRR) on this furnace? Try 10% and 20%, and then use the interpolation method to find the IRR. (correct your final answer to two decimal places)
In: Economics
A large manufacturing company is now evaluating three mutually exclusive production systems. The following table describes the data:
System |
A |
B |
C |
Initial investment (millions) |
$2,005 |
$8,800 |
$19,000 |
Annual receipts less expenses (millions) |
$ 600 |
$1,500 |
$ 2,300 |
Salvage value (millions) |
$15 |
$100 |
$330 |
Useful life (years) |
5 |
10 |
20 |
Apply repeatability assumption and use the AW method to select the best system. The MARR is 10% per year, and the system chosen must provide service for 20 years. (correct your final answer to 3 decimal places)
In: Economics
A large manufacturing company is now evaluating three mutually exclusive production systems. The following table describes the data:
System |
A |
B |
C |
Initial investment (millions) |
$2,005 |
$8,800 |
$19,000 |
Annual receipts less expenses (millions) |
$ 600 |
$1,500 |
$ 2,300 |
Salvage value (millions) |
$15 |
$100 |
$330 |
Useful life (years) |
5 |
10 |
20 |
Apply repeatability assumption and use the PW method to select the best system. The MARR is 10% per year, and the system chosen must provide service for 20 years. (correct your final answer to 3 decimal places)
In: Economics
Question 1
a) Discuss, using graphs, how the BP curve is derived. Which factors determine its slope and how?
b) Ireland is a small open economy can you explain how Irish BP looks like?
c) What are the factors that cause BP curve to shift and how?
d) What is External Imbalance? Show in graphs.
e) Assume that you have fixed exchange rates and a SOE with perfect capital mobility. Assume that you start from an external imbalance (take the case that r in the internal equilibrium is higher than what it should be). Describe the adjustment to external equilibrium.
In: Economics
In one to two pages discuss a way out and way forward regarding chronic budget deficits. In your own words. Please if you can write a paragraph. I put this question up 3 times and its been copy past and not explained well, or put in there own words. Anything will help please. Economics
In: Economics
I want to information about South Korea's poverty with own comments.
In: Economics
Question 1
In: Economics
Topic/ All government activities should be financed with a
benefit tax.
write an essay in which you argue the statement is true. Use a
diagram of an economic model if it helps in making your argument.
Your essay should be 500-600 words
In: Economics
The Palm Tree Café is considering to buy a new Coffee blending machine. Since there are many offerings, the manager asks for your professional opinions.
Which Engineering Economics Principles can be applied in this problem? Give 3 principles and their reasons.
In: Economics