Managerial Economics Assignment | Economic Homework Help

Question 1 20 pts John’s Pie Shop sells pies. Last year, it sold on average 1,000 pies per month and had the following average monthly total costs: Rent $ 1,000 Materials 10,000 Hourly labor 8,000 Manager’s salary 3,000 The normal selling price is $25.00 per pie, and John usually sells 1,000 pies per month. Costco has offered to pay John’s $20.00 per pie to supply them with 500 pies during the next month. (Assume that this is a one-time sale and future sales to Costco are not likley.) In addition, John’s Pies will incur a one-time transportation cost of $500 to deliver the pies to Costco. Assuming that John’s has the capacity to fill this order along with its other production, and that accepting this order will not cause problems with any of their other customers, should John’s Pies sell the 500 pies to Costco? Justify your answer Question 2 20 pts James takes $250,000 out of his brokerage account earning on average 10% per year and purchases 25 acres of land. He quits his $75,000-a-year job as a golf pro and opens up a golf driving range on the land. The range generates $200,000 in revenues each year. He spends $80,000 a year in employee salaries, $40,000 a year in golf balls and other golfing equipment and $10,000 in office supplies. What is James’ accounting or business profit? Explain. What is James’ economic profit? Explain. Assuming that James is indifferent between working as a golf pro and owning a driving range, should James continue to own the driving range? Why? Question 3 20 pts A permit in California to sell marijuana to retail customers sells for $100,000. The owner can sell the permit to others at any price. However,the owner of the permit can get back $80,000 as a refund from the state of California at any time if the owner of the permit decides not to use it. You paid $100,000 for this permit 3 years ago and currently own a retail store selling marijuana. Poor health makes you think about selling the permit. You therefor spend $6,000 on advertising hoping to get $88,000 for the permit. 1. What is your sunk costs? Explain. 2. Was your decision to spend $6,000 on advertising a smart thing to do? Use only the information above. Explain why or why not. After a long wait, suppose you get an offer of $82,500 for the permit. 3. Should you take the offer of $82,500? Explain why or why not. Question 4 20 pts You are a fanatic when it comes to keeping records for your car. You calculate every penny spent on your car and know exactly how many miles you drive. You drove 10,000 miles a year in 2018. Due to your great record keeping, you calculated that you spent $6,000 on your car in 2018. These costs included the costs of gasoline, a set of 4 tires, 2 visits to the mechanic for routine maintenance, license and registration fees, depreciation, principal and interest on your car loan. Your employer wants you to drive your own car to a conference for work. Your employer will pay you $0,57 cents per mile. Should you drive your own car or hitch a ride with someone else? Do you have enough information above to make that decision? Explain why or why not. Question 5 20 pts You are the New Product Manager for a medical device company. Your new product is at the end of testing and development and the product is expected to be launched in January 2020. If it is launched in January 2020, your finance expert recently told you that the “NPV of the project is greater than $0” and that the product will be “profitable to the firm over the 10 year life cycle of the product”. Today, you found out that your product needs to go through even more testing and development due to increased government regulation and that your product may not launch until January 2021. Without consulting your finance expert, how do you think this affects the assessment of going ahead and funding the development of the product? Explain.

Homeworkmarket
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Homework Market

HomeworkMarket

Quality Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Homework Market

Qualified Writers

We have hired a team of professional writers experienced in academic and business writing. Most of them are native speakers and PhD holders able to take care of any assignment you need help with.

HomeworkMarket

Unlimited Revision

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account.

HomeworkMarket

Timely Delivery

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. We will always strive to deliver on time.

HomeworkMarket

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text.

HomeworkMarket

Customer Support 24/7

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Homework Market

Place your order

Fill in the order form and provide all details of your assignment.

Homework Market

Proceed with the payment

Choose the payment system that suits you most.

Homework Market

Receive the final file

Once your paper is ready, we will email it to you.

Homework Market Writing Services

No need to work on essay at night. Sleep tight, we will cover your back. We offer all kinds of essay writing services.

HomeworkMarket HomeworkMrket

Essays

Essay Writing Services

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

HomeworkMarket HomeworkMarket

Admissions

Admission Essays

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

HomeworkMarket HomeworkMarket

Editing

Essay Editing

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

HomeworkMarket HomeworkMarket

Research Paper

Research Paper

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied.