Tutor profile: Erica F.
The utility costs at X corporation are a mixture of fixed and variable components. If the utility costs on average are $0.40 per hour at an activity level of 9,000 machine hours and $0.25 per hour at an activity level of 18,000 machine hours. What is the expected total utility cost if the company has 13,000 total machine hours.
First do cost per hour times machine hours: .40 x 9000=3600 .25 x 18,000=4500 Then find the differnce in cost and the difference in machine hours worked: 4500-3600=900 18,000-9000=9000 Then divide then difference in cost by the difference in hours, this will give you the variable rate per hour. 900/9000=.1 Now multiply this rate by your original machine hoursand find the difference between what the first total was and what this total is, this will gove you your fixed cost. (The fixed cost will come out the same for each scenario. .1 x 9,000=900 .1 x 18,000= 1,800 3600-900=2,700 4500-1800=2,700 Finally you take the machine hours you want to find out and plug it in with the variable and fixed cost you found. .1 x 13,000=1,300 2,7000+1,300=$4,000 Summary: Fixed cost: $2,700 Variabe cost: $0.10 cost for 13,000 machine hours: $4,000
What are the three key consumption sensitivities affecting aggregated demand?
wealth effect,interest rate effect and foreign exchange effect
What is an example of an economic resource that violates the law of demand? Explain the concept and where in the world it can be found.
A giffen good is an economic product that as the price goes up people consume more of it or as the price goes down they consume less of it. This concept violates the law of demand. Although this was only a theory at first proven possible only mathmatically it has recently been found in the real world. In a remote village in china where food resources are sparce there are only two main food soources, rice and chicken. When one one food source runs low the price of the other raises because it is the only source. People are forced to buy the product becaue they have no other option making it deffy the law of demand.
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