CH 3 CLASS A's PT 1.pdf - ~ yr H h 0 L 1 Fill in US blanks...

Info icon This preview shows pages 1–2. Sign up to view the full content.

Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: - + .‘ ~ yr»\. H h 0“ " L 1. Fill in US blanks In the following table to answer the questions below. H 8 ' A1 —-g M f, ‘ :11- - g? A A Total Benefit Total Cost Net Benefit Marginal Mammal COSt Benefit ‘lflj '-_ - a. What is the optimal level of activity in the table above? b. What is the value of the net benefit at the optimal level of activity? Can the net benefit be increased by moving to any other level of A? .9 "Va? .p a- 3M5; N no ”3’ ’ 3t. N " Lo ,1 Now suppose a fixed cost of $24 is added to the process of the activity above. Fill in the blanks In the table below. (AC is the average cost per unit of activity). 4'" H U‘ 3 n u — (A m U1 5 ,, . l at (I) 5-. P O c. How does adding $24 of fixed costs affect total cost? Net benefit? d. How does adding $24 of fixed costs affect marginal cost? Did the optimal level of activity change? e. What level of activity minimizes average cost per unit? Is this the optimal level of activity? 2. An office manager is considering purchasing a new copy machine for tbcoffiu. Copy mam Brand A cost $2,500 and will produce about 500,000 copies before it wears out. Brand 6 W produce 600,000 copies and costs $4,000. Brand C will produce 580,000 copies and costs $2,618), How should the office manager rank the three copy machine bands in terms of value for a» amountof money spent? A R C. . (Cries 5.0,oo‘5 on06‘ ($0009 out» 1-509 «no a.” to" $>£ wo‘ b"__...."" I"... 3"“ Zoo 4,...” lro 1... 13,3 3. An azlmising executive wants a find the optimal level of two marketing acti ' v , which yield the expected total benefits presented in the table below. The cost of activity X is $400 a unit and the cost of activity Y is $1000 per unit. Total Total benefit of benefit of activity X Level of activity v, the optimal levels of each activity? What is the total benefit associated with the optimal level of X and Y? (D 6%.»: .4. x 400 3‘ o" ‘I- Q 2“ um‘i 9“ X 4’09 “Jo g 0" . :‘ ‘* \. v 3" X 4.09 0 ‘3‘. V«\* ." \I [090 ...
View Full Document

  • Spring '08
  • ISSE

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern