Exam 3: Marginal Analysis for Optimal Decision Making

If profits depend on both how much is produced output)and on the level of advertising,then a profit-maximizing firm should choose the levels of output and advertising at which

In making a decision about whether to increase its advertising budget the firm management should not consider

an unconstrained maximization problem

Refer to the following table: What is the net benefit of the 5^th unit of the activity?

Gonzo consumes only two things--coke and hot dogs.We can define the addition to "happiness" of consuming an additional coke as the marginal utility of coke and that for hot dogs as the marginal utility of hot dogs.The prices of coke and hot dogs are fixed and Gonzo has a limited budget.To maximize "happiness" subject to his limited budget,Gonzo should purchase coke and hot dogs so that

Refer to the following table: What is marginal benefit for the 4^th unit of the activity?

The manager of the customer service department at a bank can hire employees with a high school degree HS)who earn $10,000 annually or employees with a bachelor's degree B)who earn $20,000.The manager wants to maximize the number of customers served given a fixed payroll. Given the above info,if the manager currently has three HS and three B,what must be true?

Which of the following statements represents bad decision making?

A local charity has decided to solicit donations door-to-door.The table below shows estimated donations for each hour a volunteer spends in the city,in the suburbs,and on campus. Given the above information,and given an optimizing solution,the fourth hour solicited yielded

When the choice variable is a continuous variable,the decision rule for an unconstrained maximization problem is:

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?

A computer services center has a problem with "malicious" computer usage.The center's director has decided to hire additional personnel to monitor computer usage.In order to minimize the total cost of the malicious usage,the director should hire the number of monitors at which

A grocery store hires cashiers and baggers.Cashiers earn $8 an hour; baggers earn $4 an hour.The manager,who wants to maximize the number of customers served given a fixed payroll,expects the following productivity from cashiers and baggers: Given the above information,what is the maximum possible number of customers that can be served with a payroll of $32?

A firm will maximize profit by producing that level of output at which

Choice variables

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. Based on the above information,if operators receive $400 a week,what is the lowest possible total cost of personal calls?

The optimization rule for unconstrained optimization is to select that level of activity at which

A radio manufacturer is experiencing theft problems at its warehouse and has decided to hire security guards to reduce the thefts.The firm wants to minimize the net cost of warehouse thefts. Given the above info,if each security guard is paid $200 a week and the cost of a stolen radio is $50,how many security guards should the firm hire?

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 should the politician allocate his speaking time?

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,if the manager has an annual budget of $140,000 and currently is hiring two engineers and three market researchers,then