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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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At Mattel, a marketing information system stores data on regional sales activities, promotional costs, and international invento
Sonja [21]

Answer:

It is false.

Explanation:

At Mattel, a marketing information system stores data on regional sales activities, promotional costs, and international inventory levels. These data are not examples of external sources but are internal sources.

Internal sources of market information are informations that are gotten from within the company such as regional sales activities, promotional costs, and international inventory.

However, the external sources of information are informations that are gotten outside of the company such as survey from customers, competitors etc.

5 0
3 years ago
Consider again the law that would require employers to provide the same package of nonwage benefits offered to full-time employe
emmainna [20.7K]

Answer:

The increase labor cost that differs with the hours worked, there is no effect on the quasi cost.

Explanation:s

Solution

In this example stated, the benefits will be given to the part time workers, but in the proportion or respect to the  number pf hours worked or input

Labor cost per hour will increase.

Furthermore, this cost is not is not on the basis of employment, but rather on the basis of hours worked, so the quasi fixed cost is not affected on the long run.

3 0
3 years ago
An industry consists of three firms with sales of $355,000, $825,000, and $435,000.
iogann1982 [59]

Answer:

Calculating Herfindahl-Hirschman Index and Four-Firm Concentration Ratio:

a. Herfindahl-Hirschman index (HHI) = 3,814

b. The four-firm concentration ratio (C4) = 1

c. If the two firms with sales of $355,000 and $435,000 merged, the resulting HHI would increase by 1,723 to 5,537.  The post-merger HHI now exceeds that allowed under the Guidelines (2,500). The increase in HHI is more than that permitted under the Guidelines (200), the merger is likely to be blocked by the Department of Justice.

Explanation:

a) Data and Calculations:

Sales of three firms in an industry:

                            Sales          Industry Share

Firm A sales = $355,000        22% ($355,000/$1,615,000 * 100)

Firm B sales =   825,000         51% ($825,000/$1,615,000 * 100)

Firm C sales =   435,000        27% ($435,000/$1,615,000 * 100)

Total sales =  $1,615,000

Herfindahl-Hirschman index (HHI) = 3,814 (22² + 51² + 27²)

Four-firm concentration ratio (C4) = Sales of the four largest firms/Industry sales = $1,615,000/$1,615,000

If the two firms with sales of $355,000 and $435,000 were to merge, the new Herfindahl-Hirschman index (HHI) = 5,537(49² + 51²)

Increase in HHI as a result of the merger = 1,723

5 0
3 years ago
Manuel's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Manuel's very tiny kitchen has barely
Ivenika [448]

Answer:

In the short run, these workers are variable inputs, and the ovens are fixed inputs.

Explanation:

Giving the following information:

Manuel's kitchen cannot fit more than three ovens, Manuel cannot change the number of ovens he uses in his production of pizzas in the short run. However, Manuel's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Manuel lets them know how many workers he needs for each day of the week.

In the short run, these workers are variable inputs, and the ovens are fixed inputs.

8 0
3 years ago
Starlight Drive-Ins borrowed money by issuing $3,000,000 of 7% bonds payable at 98.5.RequirementsR1. How much cash did Starlight
Sophie [7]

Answer:

1) cash at issuance 2,955,000

2) cash for maturity 3,000,000 plus 210,000 interest = 3,210,000 total cash outlay at maturity

3) cash interest 210,000

Explanation:

1) It will receive 98.5/100 of the face value

3,000,000 x .985 = $2,955,000

2) at maturity it will still have to pay the face value regardless of the amount received for the bonds aty issuance thus; $3,000,000 We will also have to add up the interest for the last period.

3) the cash interest will be considered using the face value and the coupon rate of 7% regardless of current market rate and market price of the bond.

3,000,000 x 7% = 210,000

8 0
3 years ago
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