Monopoly behavior (Chapter 26 in the book)

Problem 1. Suppose you want to open an amusement park. Your estimate of the daily attendance is 1000 people. Further, you expect that each person will demand

x(p)= 50-50p rides, where p is the price per ride. All people are the same, and there cannot be negative rides. The marginal cost of a ride is zero.

(a) What is each person’s inverse demand for rides?

(b) How many rides per person will maximize your profits?

(c) What will be the profit-maximizing price per ride?

(d) What will be your profit per person?

(e) What is the Pareto efficient price per ride?

(f) How many rides will be purchased at the Pareto efficient price by a single person?

(g) Ho much consumer surplus per person will be generate at Pareto efficient price and quantity?

(h) If you decide to use a two-part tariff, what would be an admission fee and a price per ride for a single person?

A forest product company likes to develop a wood pellet manufacturing plant in Maryland and has the following cost information on five likely destinations (table below). The expected sale price of wood pellets per bag is $5. a. Please find out which location is preferable in terms of BEP_x and/or BEP_$? b. What should be the minimum out level the company should target to earn some profit? c. Using the locational break-even analysis (cross-over quantity with minimum cost), can you identify any other location that may be more profitable? d. What should be the minimum quantity of output at the new location for maximizing profit?

Let's think about drug addiction and how American society treats individuals that have addiction problems. When someone is labeled a drug addict, they're identified by their problem and not as an individual. I thought this video provides an interesting alternative to our current policies.  

Drug related arrests are also disproportionate if we examine factors such as race and income level. The speaker discusses the "war on drugs" and how it has not been very effective in combating drug addiction and drug use.  

1. Do you think the war on drugs has been effective?

2. The speaker discusses two experiments on mice, one on solitude and one in "rat park". How are the results different in each experiment? How can we apply these two circumstances to human life?

3. What do you think are better solutions to reducing the rates of drug addiction.  

4. What programs can help individuals recovering from drug addiction reconnect with society?

Project 2: Capital Budgeting Activity
Scenario:
Your client owns a successful restaurant in downtown Chicago (at least pre-Covid-19!). She wants to open a second restaurant in the suburbs and has asked you to help her choose between two locations. Key information is listed below. Using the four capital budgeting methods that we know, prepare a presentation that shows your recommendation to your client (and why).

Initial Investment: 2,500,000 and use 9% discount rate

Annual non-cash (all depreciation) expenses:
Use straight line depreciation to find!
For both, assume no residual value and: 9% discount rate

REQUIREMENTS:

Calculate the following and note each formula

1. Payback Period
2. NPV
3. Internal Rate of Return Method
4. Profitability Index

In the 2009 film 2012, there is a scene in which a supervolcano erupts under Yellowstone National Park. It has been fairly recently discovered that in at least some volcanic eruptions, the magnetic field of the earth is reversed in the region of the volcano (only while it is erupting). The magnetic field during this eruption would have a magnitude of 5.3 ⋅ 10−4 ? and be oriented 68.6∘ south of down. During the eruption, there is a pyroclastic flow (this is the fast lava-looking “liquid” that flows down the volcano first), which can move at speeds upwards of 200 ?⁄?. One particular rock flowing in this has a mass of 150 ????? and an electric charge of +1.2 ⋅ 104 ?.

1. Find the Lorentz (magnetic) force (magnitude and direction) acting on this rock when it has just started flowing near the top of the volcano. At this point, it flows at a speed of 50 ?⁄? vertically downward.

2. Find the Lorentz (magnetic) force (magnitude and direction) acting on this rock when it has just reached the bottom of the volcano. At this point, it flows at a speed of 200 ?⁄? horizontally east.

1.At takeoff a commercial jet has a 65.0 m/s speed. Its tires have a diameter of 0.700 m.

(a) At how many rpm are the tires rotating?
___ rpm
(b) What is the centripetal acceleration at the edge of the tire?
____ m/s²
(c) With what force must a determined 10^-15 kg bacterium cling to the rim?
____N
(d) Take the ratio of this force to the bacterium's weight.
____(force from part (c) / bacterium's weight)

2.(a) A 19.0 kg child is riding a playground merry-go-round that is rotating at 35.0 rpm. What centripetal force must she exert to stay on if she is 1.00 m from its center?
____ N
(b) What centripetal force does she need to stay on an amusement park merry-go-round that rotates at 3.00 rpm if she is 6.00 m from its center?
____ N
(c) Compare each force with her weight.
____ (force from part (a) / weight)
____ (force from part (b) / weight

1.Jared and Laura have renter’s insurance with a $500 deductible and a $20,000 coverage limit. Unfortunately, a fire destroys their apartment, requiring them to stay in a hotel for $100 a night for 10 nights. In addition, they lost $7,000 worth of property. How much will their renter’s insurance pay?

A.$7,500.

B.$7,000.

C.$6,500.

D.$8,000.

2. Jason, age 49, recently used $10,000 from his IRA to purchase his first home. Which of the following applies?

A.Jason will have to pay taxes and a penalty for taking a distribution from his account before age 59½.

B.Jason will not have to pay taxes nor a penalty since he is withdrawing money from his own IRA.

C.Jason will incur a 10% penalty for taking a distribution before age 50½, but he will not have to pay income taxes since he is a first-time homebuyer.

D.Jason will have to pay taxes on his distribution, but he will not incur an additional 10% penalty since he is a first-time homebuyer.

1. Discuss the importance of marketing activities for each of the segments listed in the previous question.
   1. Discuss and explain how important you think advertising is for each of the market segments. Provide specific examples.
   2. Discuss and explain how important you think personal sales is for each of the market segments. Provide specific examples.
   3. Discuss and explain how important you think sales promotions are for each of the market segments. Provide specific examples.
   4. Discuss and explain how important you think public relations are for each of the market segments. Provide specific examples.
2. What is the difference between Capital and Operating Budget?
3. According to the simulation manual, how can you increase the quality rating for your hotel in the simulation?
4. Explain what diminishing marginal return is. Discuss if you can use the diminishing marginal return concept when you make your expenditure decisions. Give a specific example.
5. What is a positioning map? Explain and discuss how you can use positioning maps to make better managerial decisions.

Consider the following data between number of visitors x and the amount of wildlife seen in Cheaha State Park y,

(a) Find the mean of x and the mean of y.

(b) Find the standard deviation of x and the standard deviation of y. Use Excel.

(c) Find the correlation coefficient. Use Excel. (d) Find the slope and intercept of the linear regression line. Then write down the line.

(e) Make predictions for all the values of x in the table. Then calculate the residuals.

(f) Calculate the sum of squared residuals. (g) Calculate the standard deviation of the regression.

(h) Using the mean of x and your data for x, calculate the sum of squared deviations.

(i) Write down an appropriate null and alternative hypothesis.

(j) Calculate the test-statistic.

(k) Make a prediction for when x is 470, and calculate (xp − ¯ x)2. Then make a confidence interval around your prediction.

Provide an evaluation of two proposed projects, both with 5-year expected lives and identical initial outlays of $110,000. Both of thj4ese projects involve additions to Liburdi’s high highly successful hotel product line, and as a result, the required rate of return on both projects has been established at 12 percent. The expected free cash flows from each project are as follows:

In evaluating these projects, please respond to the following questions:

1. Why is capital-budgeting process so important?
2. Why is it difficult to find exceptionally profitable projects?
3. What is the payback period on each project? If Liburdi imposes a 3-year maximum acceptable payback period, which of these projects should be accepted?