1.
Toni’s opportunity cost of production:
$24000 + $1500 + $55000 + $100 = $80,600
Toni’s economic profit in 2012:
$45000 - $80600 - $1750 - $1500 = -$38,850
2.
The methods that are technologically efficient are with a PC, with a pocket calculator,
and with a pencil and paper. It costs more and takes up more time
3i)
Pocket calculator
3ii)
Pocket calculator
3iii)
PC
4)
It is an Oligopoly, and the Herfindahl-Hirschman Index is 1800.
5)
A = $60
B = $90
C = $100
D = $130
E = $140
6a)
6b)
The ATC curves all differ because they all
have different output values for the same Labor.
6c)
The Average Cost for 15 rides a day is $100
The Average Cost for 18 rides a day is $97.22
6d)
It allows her to rent the amount of balloons which will minimize the average total cost
7a)
The market price of a smoothie is $2.91 per smoothie
7b)
The market quantity of a smoothie is 700 smoothies per hour
7c)
7 smoothies
7d)
Each firm incurs an economic loss of $10.01 per hour
8)
Price
Quantity
Demanded
Total Cost
Total Revenue
Marginal
Revenue
220
0
80
0
0
200
1
160
200
200
180
2
260
360
160
160
3
380
480
120
140
4
520
560
80
120
5
680
600
40
9)
10)
The firm's profit maximizing output is 2.5 rides at a price of $120, and the profit
maximizing price is $170.
The firm’s economic profit is $105.