Application_Problems_Ch05

Application_Problems - Chapter5: 1 Whattypeofeconomies(scale,scope,orlearning)mayberealizedinthe followingcases a platforms b

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Chapter 5: Applications Problems 1. What type of economies (scale, scope, or learning) may be realized in the  following cases:  a. Microsoft develops and produces Word both for the Mac and PC  platforms.  b. Norwest Bank, known for superior customer service, merged with  Wells Fargo Bank, recognized for its use of technology in banking.  c. Banks contract with check printing companies 2. Explain carefully why relative productivity and relative wages matter in a  company's policy on what skill level of workers to hire.  3. A tax preparation firm hires both bookkeepers and accountants to process  household tax returns. Currently both types of workers are assigned to the  preparation of simple household returns. Assume the firm pays market  salary and benefits, which are $30 per hour for bookkeepers and $50 for  accountants. Productivity data the firm has collected shows that in an 8- hour day, bookkeepers can process 10 tax returns and accountants can  process 12 of the same type of tax returns. Assume the quality of the tax  return preparation is the same across these two skill levels. Is the firm  currently hiring a cost minimizing ("optimal") mix of bookkeepers and  accountants? Or would you recommend that the firm increase its hiring of  bookkeepers relative to accountants, or vice-versa? Explain carefully.  4. Read Shirley Leung, "Why Nobody Wants to be the Drummer in a 
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This note was uploaded on 09/23/2010 for the course ECON 305 taught by Professor Snyder during the Fall '10 term at Arizona Western College.

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Application_Problems - Chapter5: 1 Whattypeofeconomies(scale,scope,orlearning)mayberealizedinthe followingcases a platforms b

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