Economics and Brazilian Shrimp Farmers
MG 640 Managerial Economics
Homework Assignment
Week 1 Chapter 1: The Fundamentals of Managerial Economics
For this week read Chapter 1 and the Headline: Amcott Loses $3.5 Million: Manager Fired.
Answer the following questions:
Question 1. Page 27
Southwest Airlines begins a “bags Fly Free” campaign, charging no fees for a first and second checked bag. Does this situation best represent
a) Producer-producer rivalry?
b) Consumer-consumer rivalry?
c) Producer-consumer rivalry?
Explain your choice.Top of Form
Bottom of Form
Question 2. Page 27
What is the maximum amount you would pay for an asset that generates an income of $ 250,000 at the end of five years of the opportunity cost of using funds is 8 percent?
Question 8 page 28
Jaynet spends $30,000 per year on painting supplies and storage space. She recently received two job offers from a famous marketing firm- one offer was for $110,000 per year, and the other was for $80,000. However, she turned both jobs down to continue a painting career. If Jaynet sells 25 paintings per year at a price of $8,000 each:
a. What are her accounting profits? Show your steps leading to your answer
b. What are her economic profits? Show your work!
Question 21. Page 32
Brazil points to its shrimp-farming industry as an example of how it can export shrimp in the world market. One decade ago, Brazil exported a meager 400 tons of shrimp. Today, Brazil exports more than 58,000 tons of shrimp, with approximately one-third of that going to the United States. Brazilian shrimp farmers however, potentially face a new challenge in the upcoming years. The Southern Shrimp Alliance- a U.S. organization representing shrimps-producing countries is selling shrimp below “fair market value.” The organization is calling for the United States to impose a 300 percent tariff on all shrimp entering the United States to impose a 300 percent tariff on all shrimps entering the United States’ border. Brazilian producers and the
Homework Assignment
Week 1 Chapter 1: The Fundamentals of Managerial Economics
For this week read Chapter 1 and the Headline: Amcott Loses $3.5 Million: Manager Fired.
Answer the following questions:
Question 1. Page 27
Southwest Airlines begins a “bags Fly Free” campaign, charging no fees for a first and second checked bag. Does this situation best represent
a) Producer-producer rivalry?
b) Consumer-consumer rivalry?
c) Producer-consumer rivalry?
Explain your choice.Top of Form
Bottom of Form
Question 2. Page 27
What is the maximum amount you would pay for an asset that generates an income of $ 250,000 at the end of five years of the opportunity cost of using funds is 8 percent?
Question 8 page 28
Jaynet spends $30,000 per year on painting supplies and storage space. She recently received two job offers from a famous marketing firm- one offer was for $110,000 per year, and the other was for $80,000. However, she turned both jobs down to continue a painting career. If Jaynet sells 25 paintings per year at a price of $8,000 each:
a. What are her accounting profits? Show your steps leading to your answer
b. What are her economic profits? Show your work!
Question 21. Page 32
Brazil points to its shrimp-farming industry as an example of how it can export shrimp in the world market. One decade ago, Brazil exported a meager 400 tons of shrimp. Today, Brazil exports more than 58,000 tons of shrimp, with approximately one-third of that going to the United States. Brazilian shrimp farmers however, potentially face a new challenge in the upcoming years. The Southern Shrimp Alliance- a U.S. organization representing shrimps-producing countries is selling shrimp below “fair market value.” The organization is calling for the United States to impose a 300 percent tariff on all shrimp entering the United States to impose a 300 percent tariff on all shrimps entering the United States’ border. Brazilian producers and the