Watch the following videos which will give you an introduction to some of the main concepts for this module. Pay special attention to the discussion about fixed versus variable costs and accounting versus economic profit:
Clifford, J., & Hill. J. (2016). Revenues, profits, and price. CrashCourse. https://www.youtube.com/watch?v=UWImfFax8Ew
The following book will give you a relatively simple introduction to the key concepts covered in the module. In addition to the concepts, make sure to go carefully through the numerical examples. Read Chapter 7 of the following book (use the “Contents” tab to navigate though Sections 7.1, 7.2., and 7.3):
Taylor, T. (2014) Principles of Microeconomics. OpenStax College. http://cnx.org/contents/[email protected]:75YRzeYw@8/Introduction-to-Cost-and-Indus
Now go to this slightly more advanced book chapter that will cover the concepts from this module from the point of view of a business manager. Pay special attention to the tables and numerical examples:
Marburger, D. R., & Peterson, R. (2013). Chapter 4: What your cost accountant can’t measure: The economic theory of production and costs. Economic Decision Making Using Cost Data: A Manager’s Guide. New York, NY: Business Expert Press. [EBSCO eBook Collection. Note: to find the book enter only the title of the book in the library search engine]
Assignment Overview
Before beginning this assignment, make sure you have gone carefully through all of the required readings for this module. It is very important to carefully absorb both the general concepts as well as the numerical examples in the background readings. For this assignment, you will have to answer some purely conceptual questions as well as some numerical problems. For conceptual questions, make sure to thoroughly explain your answers and to cite specific readings from the required background materials to explain your answers. For numerical problems, make sure to show all of your work and explain how you arrived at your answers (partial credit can be given if you get the final answer wrong but do some of the steps correctly). Note that you need to use Microsoft Excel to do the graphs for the numerical problems. Do some research on fixed versus variable costs and accounting versus economic profit, and write a five-page paper answering the following questions:
Case Assignment:
1. Part A: Conceptual questions
2. Suppose you own a television factory and at your current level of output you have average total cost of $800 per television, average variable costs of $700 per television, and a marginal cost of $400. If the price your buyers are willing to pay is $500, should you decrease or increase production? Explain your reasoning, and make sure to cite at least one of the required readings in your answer.
3. You are the owner of a restaurant, and currently you have only one waiter. While this keeps costs down, many of your customers go home because they are tired of waiting in line or waiting for their order. You hire four more waiters and waitresses, and you are now able to serve a dramatically higher number of customers. Seeing the huge productivity gains from hiring more staff, you then hire 20 more waiters and waitresses. However, you are not able to serve any more customers than you were able to when your staff size was only four. In fact, your restaurant has become overly crowded because there is not enough room in your restaurant for all of your staff. You are confused as to why hiring four more staff members increased your productivity, but hiring 20 more did not. What concept from the background readings best describes what happened in this case? Explain your reasoning.
Part B: Quantitative problems
The following table gives the total weekly output of bicycles at Al’s Bicycle Town.
Table 1
Labor
Total Product (TP)
Average Product of labor (AP)
Marginal Product of labor (MP)
0
0
n/a
n/a
1
100
100
100
2
300
—-
___
3
450
___
___
4
630
___
110
5.
630
___
___
6.
___
110
___
• Complete this table.
• Draw the graphs of the marginal product (MP) and the average product (AP).
• Where do the AP and MP curve cross?
The cost of 1 worker is $2000 per month. Total fixed cost is $4000 per month.
• For this discussion, we will be looking at interactive tutorials or quizzes that might help you and your classmates with any concepts or calculations that you are having difficulty with If you are having difficulty with the numerical calculations covered in this module, try this interactive tutorial: Baker, Samuel L. (2013), Economics Interactive Tutorial. http://www.sambaker.com/econ/cost/cost.html
• Economics tutorials by Samuel L. Baker are licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
• Search the web and try to find at least one other tutorial on production costs (marginal costs, variable costs, total costs, etc.) that you find useful for this module. This could be a tutorial, a video lesson, an online practice quiz, etc. Share the link with your classmates and explain what you found useful about it. As a follow-up to your first post, try using one of the tutorials that your classmates found and share your thoughts.
place in France and England during the French Revolution. Charles Dickens demonstrates how Sydney Carton makes his decisions based on love for the benefit of others and himself and Madame Defarge makes her decisions based on hate which causes the pain and sorrow of many people. Dickens suggests that love overpowers hate because in the end those who acted on hate don’t have happy endings. Sydney Carton shows his unselfish love through his sacrifice for others; he loves the Manette family so much that he will give up his life for theirs. Sydney once says to Lucie “For you, and for any dear to you, I would do anything. I would embrace any sacrifice for you and for those dear to you. And when you see your own bright beauty springing up anew at your feet, think now and then that there is a man who would give his life, to keep a life you love beside you” (157). He lives up to what he says because later in the story he sacrifices his life so that Lucie could be with her husband Charles Darnay. He knew that Charles is what made Lucie happy and he wanted her to be happy. Sydney loves Lucie so much that he accepts the fact that she would never marry him and instead is happy that she is with Charles. He is a selfless man that is always thinking about others and never himself. Sydney was not always this way though. There was a time when he was always very depressed. Towards the beginning of the novel Sydney and Charles go out for a couple drinks and Sydney says “I am a disappointed drudge, sir. I care for no man on earth, and no man on earth cares for me” (102). He is disappointed not with himself but those around him. He drinks to solve his problems which doesn’t actually do much for him. He was a man that didn’t care about anybody including himself. Later on in the story this problem is solved because of his love for Lucie. He begins to deeply care about others especially the Manettes. In conclusion, Sydney is a selfless man that sacrifices himself for benefit of others. In contrast to Sydney Carton, Madame Defarge acts on h