Applying concepts of managerial economics

Question

I want assistance understanding and applying concepts of managerial economics.

Question 1. The manager of American Box Company conducts a study and notes his 10 workers produce approximately 2,000 boxes per week. He assumes that if he can employ 20 workers, the number of boxes will increase to 4,000 per week, and if he can employ 30 workers, the number of boxes per week will reach 6,000. Explain why the manager's assumption is correct or incorrect.

Question 2. ElectraCorp has been earning zero economic profit for the past six months. Would it be wise for ElectraCorp to cease operations? Why or why not?

Question 3. What is economic profit?

Question 4. The best price and cost scenario occurs when the price of the company's product equals marginal cost. Explain why this is so.

Question 5. Why wouldn't it be better for the price of a product to exceed its marginal cost?

Question 6. Describe the four market structures of pure competition, pure monopoly, monopolistic competition, and oligopoly.

Question 7. Under the monopolistic competition model where the vast majority of firms operate, what role is played by product differentiation?

Question 8. Why are entrepreneurs the most important people in the successful operation of many firms?

Question 9. Describe the Coase theorem and its approach to solving the externality problem.

Question 10. Some people believe that the minimum wage should be raised to $10.00 per hour "to help poor people escape from poverty." How would raising the minimum wage to $10.00 per hour actually harm poor people, businesses, and consumers in general?

Question 11. As manager of Centrix Diagnostics Services, you receive exciting news from the R & D division that a new technological breakthrough (that will very soon be discovered by all other diagnostics service companies) will cut your firm's costs of providing services by 15%. Should you recommend the current price for the services be maintained after implementing the new technology in the hopes of earning a substantial profit, or will it be wiser to lower the price for the services? Explain.

Question 12. How do tariffs imposed by the U.S. government on foreign-made steel impact the domestic price of U.S.-made steel?

Question 13. Who gains and who loses from a tariff?

Question 14. How will a quota imposed by the U.S. government on foreign-made machinery impact the domestic price of the same kind of machinery made by U.S. companies?

Question 15. Who gains and who loses from a quota?

Question 16. "We need all kinds of trade restrictions against foreign competition to protect American jobs!" Explain why this argument is seriously flawed.