Anyone understand Microeconomics?

[Metamorpho1977]

So? I could use a tutor. I will be very appreciative. Maybe someone could put their aspergers to the use of others.

 

[Spider-Fan]

I took that class before. Both that and macro.

 

[Metamorpho1977]

Here is my issue. If someone can explain it, I will be forever grateful.


grow corn and raise pigs. If Mary devotes all her resources to growing corn, she can raise 200 pounds of corn per year. If she devotes all her resources to raising pigs, she can raise 50 pigs per year. (If she apportions some resources to each, then she can produce any linear combination of pigs and corn that lies between those extreme points. If John devotes all his resources to growing corn, he can raise 80 pounds of corn per year. If he devotes all his resources to raising pigs, he can raise 40 pigs per year. (If he apportions some resources to each, then he can produce any linear combination of pigs and corn that lies between those extreme points.)


Corn
Pigs

Mary
200
50

John
80
40


What is Mary's opportunity cost of producing corn?
What is Mary's opportunity cost of producing pigs?
What is John' opportunity cost of producing corn?
What is John' opportunity cost of producing pigs?
Which person has an absolute advantage in which activities?
Which person has a comparative?
Suppose that they are thinking of each specializing completely in the area in which they have a comparative advantage, and then trading at a rate of 2.5 pounds of corn for 1 pig, would they each be better off? Explain.
How would you extend the above narrative to businesses, society as a whole or nations? Explain.

 

[Spider-Fan]

Here is my issue. If someone can explain it, I will be forever grateful.


grow corn and raise pigs. If Mary devotes all her resources to growing corn, she can raise 200 pounds of corn per year. If she devotes all her resources to raising pigs, she can raise 50 pigs per year. (If she apportions some resources to each, then she can produce any linear combination of pigs and corn that lies between those extreme points. If John devotes all his resources to growing corn, he can raise 80 pounds of corn per year. If he devotes all his resources to raising pigs, he can raise 40 pigs per year. (If he apportions some resources to each, then he can produce any linear combination of pigs and corn that lies between those extreme points.)


Corn
Pigs

Mary
200
50

John
80
40


What is Mary's opportunity cost of producing corn?
What is Mary's opportunity cost of producing pigs?
What is John' opportunity cost of producing corn?
What is John' opportunity cost of producing pigs?
Which person has an absolute advantage in which activities?
Which person has a comparative?
Suppose that they are thinking of each specializing completely in the area in which they have a comparative advantage, and then trading at a rate of 2.5 pounds of corn for 1 pig, would they each be better off? Explain.
How would you extend the above narrative to businesses, society as a whole or nations? Explain.

Opportunity cost is the cost you don't get because of what you're doing. Essentially, it is what you're allowing yourself to not have as a result of your business. So, Mary doing nothing but pigs makes her O.C. the corn. And vice versa. Same for John.

Absolute advantage I think is just a matter of who has more. So whoever has a higher corn output has absolute advantage.

Comparative advantage I remember less about, but that is prob who has a lower opportunity cost due to business. In those numbers, John wold have that. His OC's would be 80 or 40, which are lower than Mary's 250 and 50.

Last one is a math problem. Just figure out what each person's opportunity cost is and then apply that ratio to it. Then, you'll see if they benefit from doing so.

 

[Metamorpho1977]

Opportunity cost is the cost you don't get because of what you're doing. Essentially, it is what you're allowing yourself to not have as a result of your business. So, Mary doing nothing but pigs makes her O.C. the corn. And vice versa. Same for John.

Absolute advantage I think is just a matter of who has more. So whoever has a higher corn output has absolute advantage.

Comparative advantage I remember less about, but that is prob who has a lower opportunity cost due to business. In those numbers, John wold have that. His OC's would be 80 or 40, which are lower than Mary's 250 and 50.

Last one is a math problem. Just figure out what each person's opportunity cost is and then apply that ratio to it. Then, you'll see if they benefit from doing so.

Thanks Spider-Fan, that really cleared up a lot. The guy teaching the class has no concept of assistance. I don't think I'll do an online class for my next degree.

 

[Metamorpho1977]

I've got Macro the next session.

 

[Spider-Fan]

No prob man, always glad to help

Macro is ROUGH! If you think micro is hard, wait ti Macro. The first day, they tell you Micro is mostly useless in regard to macro

 

[O_B_Juan]

Does this have anything to do with "the good of the many outweigh the needs of the few" or "The good of the one outweighed the good of the many"?

 

[Metamorpho1977]

Does this have anything to do with "the good of the many outweigh the needs of the few" or "The good of the one outweighed the good of the many"?

I think that is basically the heart of the matter.

 

[KevanG]

Do I? DO I?



About as much as the next guy really

 

[Asteroid-Man]

(Please note, the shot is fake).

 

[Lunar_Wolf]

What the.... : o

 

[Metamorpho1977]

Could use a hand from some of my more intelligent than me friends on the Hype again. If you can help me with this, I will greatly appreciate it.

Assignment as Follows: A firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage per worker is $80, and the price of the firm's output is $25. The cost of other variable inputs is $400,000 per day. Although you do not know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed its total revenue.

Assume that total fixed cost equals $1,000,000. Calculate the values for the following four formulas:

Total Variable Cost = (Number of Workers * Worker's Daily Wage) + Other Variable Costs
Average Variable Cost = Total Variable Cost / Units of Output per Day
Average Total Cost = (Total Variable Cost +Total Fixed Cost) / Units of Output per Day
Worker Productivity = Units of Output per Day / Number of Workers
Then, assume that total fixed cost equals $3,000,000, and recalculate the values of the four variables listed above. For both cases, calculate the firm's profit or loss.

For both sets of calculations, compare the firm's output price and the calculated average variable cost and average total cost. Should the firm shutdown immediately when the total fixed cost equals $1,000,000? Should the firm shut down immediately when the total fixed cost equals $3,000,000?

For one of the cases, if the firm can operate at a loss in the short-run, how many employees need to be laid off in order for the company to break even? To calculate the number of workers to be laid off, divide the loss for the two situations by the daily wage per worker. Given a lower number of employees now working at the company, what is the change in worker productivity? Is the change in worker too large, and the firm should shut down immediately? Or in your opinion, can the workers increase their productivity, assuming that the units of output per day remain fixed at 200,000 units, so that the firm operates at a breakeven state?

 

[Metamorpho1977]

I believe I have the calculations correct, but I'm a musician and can only count to four, but this is what I have so far...

(Figures are per day.)
Total Fixed Cost (TFC) = $1,000,000
Number of Workers (NW) = 50,000
Worker’s Daily Wage (WDW) = $80
Other Variable Costs (OVC) = $400,000
Units of Output (UO) = 200,000
Price of Firm’s Output (PFO) = $25
First we will calculate the Total Variable Cost (TVC). As you may know, the formula for Total Variable Cost looks like this:
Total Variable Cost=(Number of Workers*Worker^' s Daily Wage)+Other Variable Costs
Next we will input the known values.
TVC=(50,000*80)+400,000
Then we work out the solution to this equation and we get a total of:
TVC=(4,000,000)+400,000
The Total Variable Cost equals $4,400,000.
Then we will calculate the Average Variable Cost (AVC).
Using this formula:AVC=TVC÷UO
We input the known values.
AVC=4,400,000÷200,000
Then divide and we get:AVC=22.
We then calculate the Average Total Cost (ATC).
Using this formula: ATC=(TVC+TFC)÷UO
We then input the known values.
ATC=(4,400,000+1,000,000)÷200,000
ATC=5,400,000/200,000
ATC=27
Here we get a total of $27 per Unit of Output
Next we will calculate the productivity of our workers (WP). For this we use this formula:WP=UO/NW
Input our values and it looks like this: WP=200,000/50,000
Then solve the equation and we know that we produce 4 units per worker.
Now for speculation, let us assume that we have a Total Fixed Cost of $3,000,000.
TFC=3,000,000
Recalculating the Total Variable Price with the new TFC we get an equation and answer that looks like this:
TVC=(NW*WDW)+OVC
TVC=(50,000*80)+400,000
TVC=4,000,000+400,000
TVC=$4,400,000
AVC=TVC/UO
AVC=4,400,000/200,000
AVC=$22 per unit

Using our formula, ATC=(TVC+TFC)/UO we get a formula that looks like this when we input the figures: ATC=(800,000+3,000,000)/50,000. Work out the math and it looks like this:ATC=3,800,000/50,000.

Solve from there to get an ATC of $76 per unit of output.
WP=UO/NW
WP=200,000/50,000
WP=4 Units per worker



TFC=$1,000,000 TFC=$3,000,000
TVC=$4,400,000
AVC=$27 per Unit of Output AVC=$76 per Unit of Output
WP=4 Units per Worker
Price of Firm' s Output=$25

If someone can help, I'll get Tyler Perry to send you free tickets to For Colored Girls.