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A domestic producer of baby carriages, Pramble, buys the wheels from a company in the north of England. Currently the wheels cost $4 each, but for a number of reasons the price will double. In order to produce the wheels themselves, Pramble would have to add to existing facilities at a cost of $800,000. It estimates that its unit cost of production would be $3.50. At the current time, the company sells 10,000 carriages annually. (Assume that there are four wheels per carriage.)
a. At the current sales rate, how long would it take to pay back the investment required for the expansion?
b. If sales are expected to increase at a rate of 15 percent per year, how long will it take to pay back the expansion?
GKX Industries expects sales of its hydraulic seals (in inches and metric sizes) to increase according to the cash flow sequences $70+4k, where k is in years and cash flow is in $1000. What is the amount of the cash flow in year 3
At input levels L=5000 and K=2400 the marginal product of labor is 100 and the marginal product of capital is 300. At this point, how much capital can be substituted for an additional unit of labor while holding output constant
Wage rigidity: Consider an economy with the following Cobb- Douglas production function: Y=K^(1/3)L^(2/3)The economy has 1,000 units of capital and a labor force of 1,000 workers. a. Derive the equation describing labor demand in this economy as a fu..
Assume that you have a normal distribution with mean =0 and variance =1. Assumee you control a likelihood test for mu =.07 and another likelihood test for mu =8.
John runs the only carwash in town; he is a monopolist. John estimates his daily demand for carwashes is given by the expression Q = 100?4P, where Q is the number of carwashes drivers will purchase at price P. It costs John $5 in electricity, soap..
a. What is Quick's taxable gains b. What is Quick's taxable income c. What is Quick's marginal and effective (average) tax rate d. What is Quick's net cash flow after tax
Typically farmers make production decisions for the current year using the previous year's crop prices (or a weighted-average of several previous years of crop prices). Since carrots are planted year-round, it is not unreasonable to specify curren..
Chez Henri is a restaurant chain that operates in forty different cities. It employed an economist to determine the factors affecting the demand for its sales.
Tabulate or graph the results; Analyze and discuss the results, noting any interesting, tures
Blair has decided to manufacture the sub assemblies within the company and must now consider whether to rent one centerly located facility or to rent three separate facilities, each located near one of the assembly plants.
How much of each good will he demand in this case? (The price of x1 is 3$ but his income has decreased)D) Calculate utilities obtained by bundles without tax and with income tax. Draw Jack's best bundles in a graph. (Budget curves, best bundles an..
Andrea, however, claims they do have a contract and wants to enforce said contract for the price of the car. What standard would the court use to determine whether there is a contract between the parties for the sale of the car.
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