Consider the following data:
| quantity | total cost | total revenue |
| 0 | 3 | 0 |
| 1 | 9 | 12 |
| 2 | 16 | 24 |
| 3 | 24 | 36 |
| 4 | 33 | 48 |
| 5 | 45 | 60 |
| 6 | 58 | 72 |
| 7 | 74 | 84 |
a. Calculate the profit for each quantity. How many units should
this firm produce to maximize profit?
b. Calculate MR for each quantity. Calculate MC for each quantity. Does the profit-maximizing formula support your answer from part a?
c. Is this firm perfectly competitive? How do you know? Is it in the long-run equilibrium? How do you know?
d. Depict the graph.
In: Economics
| units of labor | marginal revenue proudct |
| 0 | |
| 1 | 30 |
| 2 | 24 |
| 3 | 18 |
| 4 | 15 |
| 5 | 12 |
| 6 | 10 |
Assume a firm is a monopsonist that can hire its first worker for $6 but must increase the wage rate by $3 to attract each successive worker (so that the second worker must be paid $9, the third $12, and so on). The marginal revenue product of labor is given in the table .
a. Draw the firm’s labor supply and marginal resource cost curves.
Are the labor supply and MRC curves the same or different? If they are different, which one is higher?
b. What is the competitive equilibrium wage rate?
What is the equilibrium level of employment?
c. What is the wage rate under monopsonistic conditions?
What is the equilibrium level of employment under monopsonistic conditions?
By how much does the monoposonist reduce wages below the competitive wage?
By how much does the monopsonist reduce employment below the competitive level?
In: Economics
Trace the short-term and long-term fiscal consequences of government expenditures being greater than government revenue. What is one reason to worry about the national debt? One reason not to worry?
In: Economics
Wildcat Corporation recently disclosed the following financial information:
Earnings/revenue $1 comma 490 comma 549
Assets $8 comma 800 comma 000
Liabilities $1 comma 667 comma 480
Shares outstanding 587 comma 611
Market price $30.00 per share
Calculate the price-to-book ratio, the price/earnings ratio, and the book value per share for each of the following separate scenarios:
a. Based on current information, the book value per share is
(Round to the nearest cent.)
Based on current information, the market-to-book (price/book) ratio is
nothing.
(Round to two decimal places.)
Based on current information, the price/earnings ratio is
nothing.
(Round to one decimal place.)
b. If
earnings
fall to
$993 comma 699993,699,
the
book value per share is
$1.691.69.
(Round to the nearest cent.)
Note: assume this is the only change from the current information (part a.).
If
earnings
fall to
$993 comma 699993,699,
the
market-to-book (price/book) ratio is
nothing.
(Round to two decimal places.)
If
earnings
fall to
$993 comma 699993,699,
the
price/earnings ratio is
nothing
. (Round to one decimal place.)
c. If liabilities increase to
$3 comma 293 comma 0793,293,079,
the
book value per share is
$nothing.
(Round to the nearest cent.)
Note: assume this is the only change from the current information (part a.).
If liabilities increase to
$3 comma 293 comma 0793,293,079,
the
market-to-book (price/book) ratio is
nothing.
(Round to two decimal places.)
If liabilities increase to
$3 comma 293 comma 0793,293,079,
the
price/earnings ratio is
nothing.
(Round to one decimal place.)
d. If the company does a three-for-one stock split with no change in market capitalization, the book value per share is
$nothing.
(Round to the nearest cent.)
Note: assume this is the only change from the current information (part a.).
If the company does a three-for-one stock split with no change in market capitalization, the market-to-book (price/book) ratio is
nothing.
(Round to two decimal places.)
If the company does a three-for-one stock split with no change in market capitalization, the price/earnings ratio is
nothing.
(Round to one decimal place.)
e. If the company repurchases 20 percent of the outstanding stock, incurring additional liability to finance the purchase, the book value per share is
$nothing.
(Round to the nearest cent.)
Note: assume this is the only change from the current information (part a.).
If the company repurchases 20 percent of the outstanding stock, incurring additional liability to finance the purchase, the market-to-book (price/book) ratio is
nothing.
(Round to two decimal places.)
If the company repurchases 20 percent of the outstanding stock, incurring additional liability to finance the purchase, the price/earnings ratio is
nothing.
(Round to one decimal place.)
In: Finance
1)Suppose you own a cupcake bakery. Your revenue is $400/day and your operating costs are $100/day. If you could make $300/day bartending for someone else, then economic profits of your cupcake bakery are $__________ and your accounting profits are $__________ .
a
$0; $0
b
$0; $300
c
$100; $0
d
$100; $100
2) A bakery can produce 150 donuts per hour when they hire 10 workers and 165 donuts per hour when they hire 11 workers. Based on this information the 11th worker's marginal product is
a
10 donuts
b
11 donuts
c
15 donuts
d
165 donuts
3)If the average variable cost of producing 4 jeans at Jerry’s factory is $60, and the fixed cost of the factory per hour is $200, what is the total cost when 4 jeans are produced?
a
$60
b
$240
c
$260
d
$440
In: Economics
Brief Exercise 23-4 Bloom Corporation had the following 2014 income statement. Sales revenue $219,850 Cost of goods sold 112,740 Gross profit 107,110 Operating expenses (includes depreciation of $20,360) 53,250 Net income $53,860 The following accounts increased during 2014: Accounts Receivable $11,090; Inventory $10,530; Accounts Payable $14,260. Prepare the cash flows from operating activities section of Bloom’s 2014 statement of cash flows using the direct method.
In: Accounting
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In: Accounting
Problem 4
According to the Internal Revenue Code, bonus depreciation under §168(k) is mandatory. Explain.
Problem 5
Joseph Enterprises purchased twelve desktop computers for business use. Each computer cost $1,350. As you recommended, Joseph Enterprises purchased each computer separately. Explain.
In: Accounting
28. Total revenue minus explicit costs equal: a. Accounting profit b. Normal profit c. Economic profit d. Both a and b
29. Normal profit is just another way of saying the firm is earning: a. An economic profit b. A zero economic profit c. An accounting profit d. None of the above
30. Which of the following describes the Average-Marginal rule: a. When the marginal magnitude is greater than the average, the average is rising; when the marginal magnitude is below the average magnitude, the average is declining. b. When the marginal magnitude is greater than the average, the average is declining; when the marginal magnitude is below the average magnitude, the average is increasing. c. Is total cost divided by quantity d. Is total marginal costs divided by quantity
31. As Marginal Physical Product rises, Marginal Cost: a. rises b. falls c. remains constant d. none of the above
32. An input whose quantity cannot be changed as output changes describes: a. A variable input b. The short run c. A fixed input d. The law of diminishing marginal returns
33. When would total costs equal fixed costs? a. When there are no variable costs b. When variable costs equal fixed costs c. When variable costs equal 100 for most firms. d. None of the above
34. If Price = $20, quantity = 400 units, unit cost = $15, implicit costs = $4,000. What does economic profit equal? a. $2,000 b. $4,000 c. -$2,000 d. $8,000
35. If economic profit equals accounting profit, what do implicit costs equal? a. Explicit costs b. Total costs c. Marginal costs d. Zero e. None of the above 3. 4. If economic profit equals accounting profit, what do implicit costs equal? 5. If accounting profit is $400,000 greater than economic profit, what do implicit costs equal? 6. If marginal physical product is continually declining, what does marginal cost look like? Explain your answer. 7. If the ATC curve is continually declining, what does this imply about the MC curve? Explain your answer.
In: Economics
Instructions Journalize the March transactions, including explanations. Friendley’s records golf fees as service revenue.
P3-5A Foyle Architects incorporated as licensed architects on April 1, 2014. During the first month of the operation of the business, these events and transactions occurred:
Apr. 1 Stockholders invested $18,000 cash in exchange for common stock of the corporation.
1 Hired a secretary-receptionist at a salary of $375 per week, payable monthly.
2 Paid offi ce rent for the month $900.
3 Purchased architectural supplies on account from Burlington Company $1,300.
10 Completed blueprints on a carport and billed client $1,900 for services.
11 Received $700 cash advance from J. Madison to design a new home.
20 Received $2,800 cash for services completed and delivered to M. Svetlana.
30 Paid secretary-receptionist for the month $1,500. 30 Paid $300 to Burlington Company for accounts payable due.
The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.
Instructions (
a) Journalize the transactions, including explanations.
(b) Post to the ledger T-accounts.
(c) Prepare a trial balance on April 30, 2014.
In: Accounting