201 BS 9 Advantages of a Firm--Key - a(300 x 10 x 2 = $...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
201 Advantages of a Firm 1. A wocket is made using 10 factors of production. P.D. Eastman estimates the consumer market for wockets in downstate Illinois is 5,000. Transaction costs are $3. How much will transaction costs be if P.D. Eastman opens a wocket factory? a. $150,000 b. $15,030 c. $50,000 d. $5,010 e. None of the above 2. Tom is considering opening a restaurant in a small southern Illinois town. Tom’s specialty is jambalaya, which he serves family-style (i.e. one serving dish for the whole table). The recipe for jambalaya includes 10 ingredients. Tom estimates that each of the 300 families in the area would come to his restaurant twice a year to eat jambalaya rather than make it at home. Contracting costs average $2 per transaction. How much will it cost the community to eat jambalaya twice a year if Tom does not open the restaurant?
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: a. (300 x 10 x 2) = $ 6,000 b. 2 x (300 x 10 x 2) = $12,000 c. (300 + 10) = $ 310 d. 2 x (300 + 10) = $ 620 e. none of the above 3. A certain product is comprised of 10 factors of production. The market in which this product is used has 100 customers. Transaction costs in this market are $5 per transaction. How many transactions will take place in this market if no firm exists? a. 10 x 100 b. 10 + 100 c. (10 x 100) x 5 d. (10 + 100) x 5 e. None of the above 4. A certain product is comprised of 10 factors of production. The market in which this product is used has 100 customers. Transaction costs in this market are $5 per transaction. How much is the total transaction cost in this market if a firm exists? a. 10 x 100 b. 10 + 100 c. (10 x 100) x 5 d. (10 + 100) x 5 e. None of the above...
View Full Document

{[ 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