{"id":42,"date":"2016-08-09T11:12:30","date_gmt":"2016-08-09T18:12:30","guid":{"rendered":"http:\/\/pages.palomar.edu\/jesteban\/?page_id=42"},"modified":"2016-11-04T07:58:45","modified_gmt":"2016-11-04T14:58:45","slug":"applications","status":"publish","type":"page","link":"https:\/\/pages.palomar.edu\/jesteban\/applications\/","title":{"rendered":"Case studies &#8211; Costs"},"content":{"rendered":"<h2 align=\"left\">Answer these questions to see how much you understand the concepts discussed in this tutorial.<\/h2>\n<p align=\"left\">1. Joe Cool wants to estimate the cost of going to college full time, he understands that accountants aren&#8217;t qualified to calculate the real cost of attending college so he asks Miss Econ to help him.\u00a0 The costs of books, parking and fees are $352 per semester, he attends two semesters a year.\u00a0 Joe also has to give up his job where he currently makes $770\/month.\u00a0 What are the explicit costs per year?\u00a0 What are the implicit costs per year?\u00a0 What are the total economic costs per year?<\/p>\n<p align=\"left\">2. Two students want to start a business reselling calculators obtained from eBay, they draw up a business plan, calculate the total economic costs and come up with the following graph:<\/p>\n<p align=\"left\"><a href=\"https:\/\/pages.palomar.edu\/jesteban\/wp-content\/uploads\/sites\/52\/2016\/08\/totalcostsAPPLICATIONS.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-240\" src=\"https:\/\/pages.palomar.edu\/jesteban\/wp-content\/uploads\/sites\/52\/2016\/08\/totalcostsAPPLICATIONS.jpg\" alt=\"totalcostsapplications\" width=\"303\" height=\"276\" srcset=\"https:\/\/pages.palomar.edu\/jesteban\/wp-content\/uploads\/sites\/52\/2016\/08\/totalcostsAPPLICATIONS.jpg 303w, https:\/\/pages.palomar.edu\/jesteban\/wp-content\/uploads\/sites\/52\/2016\/08\/totalcostsAPPLICATIONS-300x273.jpg 300w\" sizes=\"auto, (max-width: 303px) 100vw, 303px\" \/><\/a><\/p>\n<ul>\n<li>Suppose they estimate they can sell 9 calculators per day at $50 dollars total, will they make money?\u00a0 How much?\u00a0 (Estimate) How do you know?<\/li>\n<li>Estimate the marginal cost of producing the 10th calculator.<\/li>\n<li>Calculate the Average Variable cost of producing 9 calculators.<\/li>\n<\/ul>\n<ol start=\"3\">\n<li>McGrease estimates that the marginal cost of producing its 1,000,000th burger is\u00a0 65 cents.\u00a0 Furthermore they calculate than they can reduce the average cost of production with the inception of their new cooking machine.\u00a0 Will the marginal cost of producing the 1,000,001th burger be higher or lower?\u00a0 Justify your answer with an explanation.<\/li>\n<li>A group of college students want to start a band named \u201cWhining Voices\u201d and with the help of one of the members who has taken economics classes at Palomar College, estimate the costs of concerts are as shown on the graph below:<\/li>\n<\/ol>\n<p><a href=\"https:\/\/pages.palomar.edu\/jesteban\/wp-content\/uploads\/sites\/52\/2016\/08\/APPLICATION3.gif\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-242\" src=\"https:\/\/pages.palomar.edu\/jesteban\/wp-content\/uploads\/sites\/52\/2016\/08\/APPLICATION3.gif\" alt=\"application3\" width=\"557\" height=\"366\" \/><\/a><\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 How many Concerts should they produce to minimize the costs of production?<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Estimate the cost per Concert at this point.<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Estimate how much the band should charge per Concert so they may recover their costs and finance voice lessons.\u00a0 Assume one time voice lessons cost $160.<\/p>\n<p>Do you think this is a viable proposition?\u00a0 Why\/why not?<\/p>\n<p>5. Maria decides to quit her $20,000 a year job and open a small store selling high fashion.\u00a0 To start her store, she takes $10,000 out of her savings account.\u00a0 She had inherited this money from her parents.\u00a0 During the first year, her expenses are as follows:<\/p>\n<p>Rent for the Store\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $12,000<\/p>\n<p>Two Hired Workers\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $24,000<\/p>\n<p>Clothes\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $40,000<\/p>\n<p>Accounting Firm\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $3,000<\/p>\n<p>Electricity\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $2,000<\/p>\n<p>Insurance\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $3,000<\/p>\n<p>Maria also works in the store ordering the clothes and doing some selling.\u00a0 During the first year, Maria\u2019s store sold $80,000 worth of clothing.<\/p>\n<p>Her Explicit Costs were\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $_________________<\/p>\n<p>Her Implicit Costs were\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $___________________<\/p>\n<p>Her Total Economic Costs were\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $___________________<\/p>\n<p>Her Fixed Costs were\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $___________________<\/p>\n<p>Her Variable Costs were\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $___________________<\/p>\n<p>Her Economic Profit was \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0$___________________<\/p>\n<p>As an economist to be \ud83d\ude42 &#8211; what advice do you have for Maria?\u00a0 Should she stay in business?\u00a0 Quit?\u00a0 Why?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Answer these questions to see how much you understand the concepts discussed in this tutorial. 1. Joe Cool wants to estimate the cost of going to college full time, he understands that accountants aren&#8217;t qualified to calculate the real cost &hellip; <a href=\"https:\/\/pages.palomar.edu\/jesteban\/applications\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":115,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-42","page","type-page","status-publish","hentry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/pages.palomar.edu\/jesteban\/wp-json\/wp\/v2\/pages\/42","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pages.palomar.edu\/jesteban\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/pages.palomar.edu\/jesteban\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/pages.palomar.edu\/jesteban\/wp-json\/wp\/v2\/users\/115"}],"replies":[{"embeddable":true,"href":"https:\/\/pages.palomar.edu\/jesteban\/wp-json\/wp\/v2\/comments?post=42"}],"version-history":[{"count":11,"href":"https:\/\/pages.palomar.edu\/jesteban\/wp-json\/wp\/v2\/pages\/42\/revisions"}],"predecessor-version":[{"id":238,"href":"https:\/\/pages.palomar.edu\/jesteban\/wp-json\/wp\/v2\/pages\/42\/revisions\/238"}],"wp:attachment":[{"href":"https:\/\/pages.palomar.edu\/jesteban\/wp-json\/wp\/v2\/media?parent=42"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}