Exam 3: Marginal Analysis for Optimal Decisions

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marginal cost is greater than marginal benefit at the current activity level,the decision maker can increase net benefit by decreasing the activity because

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D

An agency is having problems with personal phone calls made during working hours.Each minute of a personal call costs the agency $0.50 in wasted wages.The agency hires operators to monitor calls in order to attain the optimal number of personal calls (minimize total cost of personal calls). Total minutes af Numbe of personal calls (per Operators hour) 0 600 1 480 2 410 3 370 4 350 Based on the above information,what is the most the agency would be willing to pay the first operator?

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E

A politician,who wants to receive the maximum number of votes,spends 9 hours a week speaking to various groups.The table below shows his estimates of how time spent with each group will affect the number of votes he receives: A politician,who wants to receive the maximum number of votes,spends 9 hours a week speaking to various groups.The table below shows his estimates of how time spent with each group will affect the number of votes he receives:   Based on the information above,how many EXTRA votes will the politician receive if he devotes one more hour to speaking engagements (i.e.,speaks 10 instead of 9 hours per week)? Based on the information above,how many EXTRA votes will the politician receive if he devotes one more hour to speaking engagements (i.e.,speaks 10 instead of 9 hours per week)?

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Refer to the following table: Refer to the following table:   What is the net benefit of the 6th unit of the activity? What is the net benefit of the 6th unit of the activity?

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Your firm sells club soda in both grocery stores and convenience stores.You have a budget of $550 for store displays and must decide how to allocate this budget between grocery stores and convenience stores to maximize the total number of sales.The following table shows the total number of units that can be sold in grocery stores and convenience stores,according to the number of displays in each type of store.Displays in grocery stores cost $150 each and displays in convenience stores cost $100 each. Your firm sells club soda in both grocery stores and convenience stores.You have a budget of $550 for store displays and must decide how to allocate this budget between grocery stores and convenience stores to maximize the total number of sales.The following table shows the total number of units that can be sold in grocery stores and convenience stores,according to the number of displays in each type of store.Displays in grocery stores cost $150 each and displays in convenience stores cost $100 each.   Given the above information,and given a budget of $550,the maximum possible number of sales is Given the above information,and given a budget of $550,the maximum possible number of sales is

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Dr.X,an assistant professor at a large state university,is trying to decide how to allocate the 50 hours a week she spends working among the various activities expected of an assistant professor.The professor wants to maximize her raise next year and the table shows estimates of how time spent in each activity will contribute to her raise: Dr.X,an assistant professor at a large state university,is trying to decide how to allocate the 50 hours a week she spends working among the various activities expected of an assistant professor.The professor wants to maximize her raise next year and the table shows estimates of how time spent in each activity will contribute to her raise:   Given the above information,how should she allocate her time? Given the above information,how should she allocate her time?

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A government agency is having problems with personal telephone calls made during working hours.Because each minute of a personal call costs the agency $0.50 in wasted wages,it has decided to hire operators to monitor calls.The agency wants to hire the number of operators that will minimize the total cost of personal calls. Number of operators 0 1 2 3 4 5 Minutes of personal calls(per week) 3900 2300 1300 600 100 0 Based on the above information,if operators receive $300 a week,how many operators should the agency hire?

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A government agency is having problems with personal telephone calls made during working hours.Because each minute of a personal call costs the agency $0.50 in wasted wages,it has decided to hire operators to monitor calls.The agency wants to hire the number of operators that will maximize the net benefit of hiring operators to monitor calls. Number of operators 0 1 2 3 4 5 Minutes of personal calls(per week) 3900 2300 1300 600 100 0 Based on the above information,if operators receive $400 a week,what is the lowest possible total cost of personal calls?

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A toy manufacturer is experiencing quality problems on its assembly line.Every defective toy that leaves the factory costs the firm $20.The firm has decided to hire quality inspectors to catch defective toys before they leave the factory. Number of Inspectors 0 1 2 3 4 5 6 Numbei of Defective Toys (per doy) 40 24 16 10 6 2 0 Given the above information,if the cost of each defective toy rises to $50,while inspectors are paid $150 a day,how many inspectors should the firm hire?

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Gigi consumes only Perrier and cheese.In order to maximize her happiness subject to limited income,Gigi should purchase the amounts of Perrier and cheese at which

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A student taking economics,statistics,and finance has decided to spend 9 hours per week studying.The objective is to maximize the average grade,which means maximizing the total grade in the three courses.The table shows the student's estimate of the relation between time spent studying each course and the grade for each course. A student taking economics,statistics,and finance has decided to spend 9 hours per week studying.The objective is to maximize the average grade,which means maximizing the total grade in the three courses.The table shows the student's estimate of the relation between time spent studying each course and the grade for each course.   Based on the above information,how should the student allocate her time? Based on the above information,how should the student allocate her time?

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A Blue Ribbon Committee has decided that acid rain should be reduced and is trying to determine the optimal level of reduction.There are benefits from reducing acid rain (more wildlife and forests,better health,etc.),but there are also costs.The committee estimates that the marginal benefit of each unit of reduction is $1,400 - 5R,where R is units of reduction,and the marginal cost is 2R.If the committee wants to maximize the net benefit from reducing acid rain,what is marginal cost at the optimal level of reduction?

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A restaurant hires cooks and waiters.Cooks earn $10 an hour; waiters earn $5 an hour.The manager,who wants to maximize the number of meals served given a fixed payroll of $45 per hour,expects the following from cooks and waiters: \quad \quad \quad \quad \quad \quad \quad \quad \quad  Total wumber of meals seived \text { Total wumber of meals seived } Number of employees 1 2 3 4 5 Cook 200 380 540 660 740 Waiter's 120 230 310 360 390 Given the above information,the manager should hire

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A manager in charge of new product development can hire engineers and market researchers.The annual salary of an engineer is $40,000 while a market researcher receives $20,000.The marginal contribution of engineers and market researchers are: A manager in charge of new product development can hire engineers and market researchers.The annual salary of an engineer is $40,000 while a market researcher receives $20,000.The marginal contribution of engineers and market researchers are:   Based on the above information,how should a manager with an annual budget of $140,000,allocate this budget in order to maximize the number of new products developed? Based on the above information,how should a manager with an annual budget of $140,000,allocate this budget in order to maximize the number of new products developed?

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A publishing house is using 400 printers and 200 printing presses to produce books.The printers' wage rate is $20,and the price of a printing press is $100.The last printer added 20 books to total output,while the last press added 50 books to total output.In order to maximize the number of books published with a budget of $28,000,the publishing house

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A housecleaning company receives $25 for each house cleaned.The table below gives the relation between the number of workers and the number of houses that can be cleaned per week. Momber of Wariters Hauses Cieaved 1 9 2 17 3 24 4 30 5 35 Based on the above info,the marginal revenue from the fourth worker is

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A firm can maximize profit (net benefit)by choosing to produce that level of output at which

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Your firm sells club soda in both grocery stores and convenience stores.You have a budget of $550 for store displays and must decide how to allocate this budget between grocery stores and convenience stores to maximize the total number of sales.The following table shows the total number of units that can be sold in grocery stores and convenience stores,according to the number of displays in each type of store.Displays in grocery stores cost $150 each and displays in convenience stores cost $100 each. Your firm sells club soda in both grocery stores and convenience stores.You have a budget of $550 for store displays and must decide how to allocate this budget between grocery stores and convenience stores to maximize the total number of sales.The following table shows the total number of units that can be sold in grocery stores and convenience stores,according to the number of displays in each type of store.Displays in grocery stores cost $150 each and displays in convenience stores cost $100 each.   Given the above information,to maximize the total number of sales,you should choose Given the above information,to maximize the total number of sales,you should choose

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Choice variables

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A toy manufacturer is experiencing quality problems on its assembly line.Every defective toy that leaves the factory costs the firm $20.The firm has decided to hire quality inspectors to catch defective toys before they leave the factory. Number of Inspectors 0 1 2 3 4 5 6 Numbei of Defective Toys (per doy) 40 24 16 10 6 2 0 Given the above information,if each inspector is paid $100 a day,how many inspectors should the firm hire to minimize the total cost of defective toys?

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