Bus640 Managerial Economics Essay example - 944 Words

Week 2 Assignment Crystal G Tanner BUS640: Managerial Economics Brian Shaw April 23, 2012 CH 3. 2. Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC = 40P where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is MR = 1,000 - 10P How much pollution reduction should Appalachian Coal Mining undertake? Set MC = MR and solve for P 40P = 1000-10P 40P + 10P = 1000 50P = 1000 P = 1000/50 P = 20 units of†¦show more content†¦If each security guard is paid $200 a week and the cost of a stolen radio is $25, how many security guards should the firm hire? @ 0 guards 50 (200*0) + (25 * 50) = 1250 @ 1 Guard 30 (200 * 1) + (25* 30) = 950 @ 2 Guards 20(200 * 2) + (25 * 20) = 900 @ 3 Guards 14(200*4) + (25*14) = 950 @ 4 Guards 8(200*4) + (25*8) = 1000 @ 5 Guards 6(200*5) + (25*6) = 1150 Therefore Twenty-first Century Electronics should hire two guards b. If the cost of a stolen radio is $25,what is the most the firm would be willing to pay to hire the first security guard? Guard one = (50 – 30) * 25 Guard one = 20 * 25 Guard One = 500 The first security guard would be paid the maximum amount 500 c. If each security guard is paid $200 a week and the cost of a stolen radio is $50, how many security guards should the firm hire? MC = 200 Marginal Benefit (4) = (14-8)*50 MB = 6 * 50 MB = 300 TB = (50-8) * 50 – (4*200) = 1300 Therefore they should hire four guards @ $ 50 cost of stolen radio CH 4. 1. The director of marketing at Vanguard Corporation believes that sales of the company’s Bright Side laundry detergent (S) are related to Vanguard’s own advertising expenditure (A), as well as the combined advertising expenditures of its three biggest rival detergents (R). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation: S = a + bA + cR where S, A, and R areShow MoreRelatedEssay about Shrewsbury W1A BUS6401101 Words   |  5 Pagesï » ¿ Economics of Risk and Uncertainty Applied Problem Jessica Shrewsbury BUS640 Managerial Accounting Instructor Choi February 23, 2015 Economics of Risk and Uncertainty Applied Problem Problem 1: A generous university benefactor has agreed to donate a large amount of money for student scholarships. The money can be provided in one lump sum of $12 million in Year 0 (the current year), or in parts, in which $7 million can be provided at the end of Year 1, and another $7 million can be providedRead MoreUnemployment and People2492 Words   |  10 PagesUnderemployment Tiffany Allen BUS640 Prof Michael Blagg September 19, 2011 Executive Summary The down turn of the economy has stirred up some issues that most people were not prepared to deal with. The unemployment rate is at a petrifying rate and the worst part is that it is even worse than it looks. There are many factors in addition to the unemployment rate alone that are going to prolong the recovery of the job market. In this paper, â€Å"underemployment† is defined and explained in terms