Economics for Business Decisions Term Paper Example | Topics and Well Written Essays - 3250 words

Economics for Business Decisions - Term Paper ExampleIf Always Round wear out doubles the size of its production facility increasing L from 250 to d and K from 25 to 50 what happens to the greet of production, even though we do not know the wages of labor or the price of detonator? This production exhibits increasing returns to scale. Doubling the scale of production will more than double the beat of proceeds. Costs per unit will decline because the firm takes advantage of the economies of scale. Why do economies of scale and learning curve effects look similar when they be graphed? What different concepts do they represent? A graph of economies of scale shows that average costs per unit of output fall when the quantity of output increases. However, this decrease in the average cost per unit of output occurs at a decreasing rate. Economies of scale show the cost advantages larger firms have in some industries, worry basic metals, where costs per unit fall with the cumulativ e volume of output. A graph of a learning curve shows that average costs per unit of output fall when the cumulative quantity of output produced since inception increases. This decrease in the average cost per unit of output occurs at a decreasing rate. learn curves show the cost advantages firms that have cumulatively produced greater amounts of output have in some industries, like semiconductors. For many corporations, a major portion of the cost of production is fixed in the short run. ... In the long run all costs are variable costs and there are no long-run fixed costs. Wanda Weeks is tired of running her small machine tool company. She wishes to sell it in order use her time and money elsewhere. She is currently earning a stipend of $85,000 per year and a 10% return on her capital investment. She wants to take a job in a bank and invest her capital in a mutual fund. What issues should she look at before making the decision to change careers? She should look at the prospec t cost of her time and capital. The total opportunity cost running her machine tool business is the value of both her time and her capital. She should compare how much she could earn from both labor income and selling her capital investment in the machine tool business to her current labor income and capital return as the owner of this business. The Springfield Bank received 1500 inquires by-line its latest advertisement describing its establish a Certificate of Deposit (CD)-get a free CD (compact disk) promotion in the Springfield Shopper, a local newspaper. The close recent similar ad in a similar advertising campaign in the Brockman Business Newsletter, a local business publication generated 500 inquires. Each ad in the Springfield Shopper costs $500. Each ad in the Brockman Business Newsletter costs $125. Inquires from both publications have the same achievement rate in turning inquires into sales. (a.) Assuming that additional ads will generate similar response rates, is Spr ingfield Bank running an optimal mix of ads in the Springfield Shopper and the Brockman Business Newsletter? Why or why not? (b.) If you claim that the Springfield Bank is currently running an optimal mix of ads clear explain why they are using an optimal mix of ads. If you claim that the Springfield