Trident BUS530 Module 2 Case+SLP Latest 2019 January Question # 00598373 Subject: Education Due on: 02/20/2019 Posted On: 02/20/2019 09:57 AM Tutorials: 1 Rating: 4.8/5

BUS530
Managerial Economics

Module 2 Case

PRODUCTION AND COSTS

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.

Case Assignment

Part A: Conceptual questions

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.

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 na na

1 100 100
100

2 300 —–
___

3 450 ___
___

4 ___ ___
110

5 630 ___
___

6 ___ 110
___

Complete this table.

Draw the graphs of the marginal product (MP) and the average
product (AP).

To learn how to plot the data in Excel, see https://www.youtube.com/watch?v=B3U9tDcoNeI

Where do the AP and MP curve cross?

The cost of 1 worker is $2000 per month. Total fixed cost is
$4000 per month.

Complete Table 2 using your answers from Table 1 and by
computing total variable cost (TVC) and total cost(TC).

Table 2

Labor Total
Product (TP) Total variable cost
(TVC) Total cost (TC)

0 0 na 4000

1 100 2000
___

2 300 —–
___

3 450 ___
___

4 ___ ___
12000

5 630 ___ ___

6 ___ 12000
___

Draw the graphs of
the TC and TVC curves. What is the relationship between these two curves?

Complete Table 3 by using your answers from the previous
Tables and calculating the AVC, ATC, and MC.

Table 3

Total Product (TP)
Average variable cost (AVC) Average total cost (ATC) Marginal cost (MC)

0 na na na

100 20 ___ 20

300 —– ___ ___

450 ___ ___ ___

___ ___ 21.43 ___

630 ___ ___ ___

___ ___ ___ 66.67

Draw the graphs of the ATC, AVC, and MC curves. What is the
relationship between the ATC and AVC curves? Between the MC and AVC curves?

Assignment Expectations

Answer the assignment questions directly.

Stay focused on the precise assignment questions. Do not go
off on tangents or devote a lot of space to summarizing general background
materials.

For computational problems, make sure to show your work and
explain your steps.

For short answer/short essay questions make sure to
reference your sources of information with both a bibliography and in-text
citations. See the Student Guide to Writing a High-Quality Academic Paper,
including pages 11-14 on in-text citations. Another resource is the “Writing
Style Guide,” which is found under “My Resources” in the TLC Portal.

BUS530
Managerial Economics

Module 2
SLP

PRODUCTION AND COSTS

For Module 1, you did research on consumer demand and
pricing for your business idea. Continue
with the same business idea that you wrote about for Module 1, but now look at
the cost side of your business.

Do some research on various potential start-up expenses for
your business based on research on wages, office space rental rates, etc., in
your home town. More specifically, write
a three-page paper answering the following questions:

What do you think the main expenses will be for your
business? Make sure to discuss labor,
rent, equipment, and any other major expense you can think of.

Do some research on the internet or from your own personal
contacts to get a ballpark estimate of how much the specific expenses are in
your home town for the items that you listed in your answer to Question 1
above. You can use Craig’s List or
similar webpages to get an idea about wages for different positions that you
may need to hire for, and there are many webpages that have advertisements for
renting commercial property in different parts of the country.

Finally, break down your expenses into fixed plus variable
costs. Make sure to cite two of the
required background readings as justification for your classifications of your
different expenses into the fixed and variable cost categories.

SLP Assignment Expectations

Answer the assignment questions directly.

Stay focused on the precise assignment questions. Do not go
off on tangents or devote a lot of space to summarizing general background
materials.

Make sure to use reliable and credible sources as your
references. Articles published in established newspapers or business journals/magazines
are preferred. If you find articles on the Internet, make sure they are from a
credible source.

Reference your sources of information with both a
bibliography and in-text citations. See the Student Guide to Writing a
High-Quality Academic Paper, including pages 11- 14 on in-text citations.
Another resource is the “Writing Style Guide,” which is found under “My
Resources” in the TLC Portal.