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Romashka-Z-Leto [24]
2 years ago
7

b) Upscale hotels in the United States recently cut their prices by 20 percent in an effort to bolster dwindling occupancy rates

among business travelers. A survey performed by a major research organization indicated that businesses are wary of current economic conditions and are now resorting to electronic media, such as the Internet and the telephone, to transact business. Assume a company’s budget permits it to spend $5,000 per month on either business travel or electronic media to transact business. Graphically illustrate how a 20 percent decline in the price of business travel would impact this company’s budget set if the price of business travel was initially $1,000 per trip and the price of electronic media was $500 per hour. Suppose that, after the price of business travel drops, the company issues a report indicating that its marginal rate of substitution between electronic media and business travel is 1. Is the company allocating resources efficiently? Explain
Business
1 answer:
Alborosie2 years ago
6 0

It is to be noted that the company is not allocating resources efficiently. See the attached image for the Graphically illustration required.

<h3>What is allocation of resources?</h3>

This is simply the ability to efficiently distribute resources across all aspects of production.

<h3>What is the proof that the company is misappropriating resources?</h3>

MRS is the gradient of the budget line is defined by the change in the Y axis divided by the change in the x axis.

In other words, MRS is the number of units of x that a customer is ready to give up in exchange for units of y.

Note that
the MRS fo the budget line is:

-dy/dx

= -10.6/6.25

= -1.6, that is media 1.6 units of media is given for every unit of business travel.

However, the corporation claims that the MRS is -1, which indicates that for every unit of business trip, they give away one unit of media. In other words, they are paying a price equal to the cost of business travel, resulting in a resource misappropriation.

Learn more about allocation of resources at;
brainly.com/question/5322091
#SPJ1

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Exercise 15-19 (LO. 3,4) Henry, a freelance driver, finds passengers using various platforms such as Uber and Grubhub. He is sin
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Answer:

Qualified Business Income Deduction is $9,800

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Explanation:

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Modified taxable income;

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The Federal Financial Institutions Examination Council (FFIEC) promotes uniform practices among the federal financial institutio
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The correct option is 1

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The measurement of the Aggregate Supply
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C; Average Price Level

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A rectangular storage container with an open top is to have a volume of 10 m^3. The length of its base is twice the width. Mater
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Answer:

The dimension that minimizes the container is width = 1; base = 2 and height = 5

The minimum cost is $36

Explanation:

Let the width be x

So:

Width = x

Base = 2 * Width

Base = 2 * x

Base = 2x

Height = h

Volume of the box is:

Volume = 10m^3 ---- Given

Volume is calculated as:

Volume = Base * Width * Height

Volume = 2x * x * h

Volume = 2x^2h

Substitute 10 for Volume

10 = 2x^2h

Make h the subject

h = \frac{10}{2x^2}

h = \frac{5}{x^2}

Next, we calculate area of the sides.

Area = Base + Sides

Because it has an open top, the area is:

Base\ Area = Base * Width

Sides\ Area = 2[(Width * Height) + (Base * Height)]

Base\ Area = 2x * x

Base\ Area = 2x^2

Sides\ Area = 2[(Width * Height) + (Base * Height)]

Side\ Area = 2[(x * h) + (2x * h)]

Side\ Area = 2[(xh) + (2xh)]

Side\ Area = 2[3xh]

Side\ Area = 6xh

The base area costs $6 per m²

So, the cost of 2x² would be:

Cost = 6 * 2x^2

Cost = 12x^2

The side cost area costs $0.8 per m²

So, 6xh would cost

Cost = 0.8 * 6xh

Cost = 4.8xh

Total Cost (C) is:

C = 12x^2 + 4.8xh

Recall that h = \frac{5}{x^2}

So:

C = 12x^2 + 4.8x *\frac{5}{x^2}

C = 12x^2 + 4.8 *\frac{5}{x}

C = 12x^2 + \frac{4.8 *5}{x}

C = 12x^2 + \frac{24}{x}

Take derivative of C

C^{-1} = 24x - \frac{24}{x^2}

Take LCM

C^{-1} = \frac{24x^3 - 24}{x^2}

Equate C^{-1} to 0

0 =  \frac{24x^3 - 24}{x^2}

Cross multiply

24x^3 - 24 = 0 * x^2

24x^3 - 24 = 0

Add 24 to both sides

24x^3 = 24

Divide through by 24

x^3 = 1

Take cube roots of both sides

x = 1

Recall that

Width = x

Base = 2x

Height = h and h = \frac{5}{x^2}

Solve for these dimensions:

Width = 1

Base = 2 * 1

Base = 2

h = \frac{5}{1^2}

h = \frac{5}{1}

h = 5

i.e.

Height = 5

<em>Hence, the dimension that minimizes the container is width = 1; base = 2 and height = 5</em>

<em></em>

Recall that

C = 12x^2 + \frac{24}{x}

Substitute 1 for x

C = 12(1^2) + \frac{24}{1}

C = 12 + 24

C = 36

<em>The minimum cost is $36</em>

8 0
3 years ago
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