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Consider the following costs of owning and operating a car. A ¥2,300,000 RAV4 financed over 48 months at 4 percent interest means a monthly payment of ap-proximately ¥52,000. Insurance costs ¥20,000 a month regardless of how much you drive. The car gets 30 km per liter and uses regular-grade gasoline that costs ¥400 per liter. […]

As of June 2014, John Green’s international bestselling novel, The Fault in Our Stars, had sold more than 10.7 million copies. In book publishing, fixed costs are high and marginal costs are low and fairly constant. Suppose that the fixed cost of producing The Fault in Our Stars is $4 million. What is the average

While charging a general admission price of HK$10 for adults most days of the week, the Hong Kong Museum of History offers free admission every Wednesday. Why do you suppose that museums often price this way, offering free admission on one day during the week? Why would they choose a day like Wednesday rather than

The following table gives capital and labor requirements for 10 different levels of production. a. Assuming that the price of labor (PL) is $6 per unit and the price of capital (PK) is $4 per unit, compute and graph total cost, marginal cost, and average variable cost for the firm. b. Do the graphs have

For each of the following businesses, what is the likely fixed factor of production that defines the short run? a. Airportb. Concert hallc. Accounting officed. Car factorye. Resort

Explain which of the following is a fixed cost or a variable cost for Toyota a. The cost of aluminum used for its automobiles.b. The property taxes on its Toyota City assembly plant.c. The cost of labor for its assembly line workers.d. The yearly payments for the naming rights for the Toyota Sports Center in

We s t End theatre, London, is considered to represent one of the highest levels of commercial theatre in the English-speaking world. The “theatre land” contains approximately fifty venues, attracting more than 14 million attendees in 2014. Box office ticket prices range from less than £10 for a few of the smaller shows to over

Do you agree or disagree with this statement? Firms minimize costs; thus, a firm earning short-run economic profits will choose to produce at the minimum point on its average total cost curve. You are given the following cost data:Total fixed costs are $60. How many units of output will this firm produce at a price

Do you agree or disagree with each of the following statements? Explain your reasons. a. For a competitive firm facing a market price above aver-age total cost, the existence of economic profits means that the firm should increase output in the short run even if price is below marginal cost.b. If marginal cost is rising

When an economy dips into a recession, consumers will often be relatively pessimistic about the future for an extended period of time. How will this pessimism affect the speed and strength of the recovery? Feel free to use the data of Exhibit 2 in your response to this question. Discuss. Sample Solution The post Recession