Questions for Critical Thinking

Questions for Critical Thinking

QUESTIONS FOR CRITICAL THINKING 1
From the end-of-chapter discussion questions (DQ) and problems (P)

Salvatore Chapter 1:

a.    Discussion Questions: 9.
b.    Problems: 6, 15, and spreadsheet problem (p. 39)

Note:
1.    P15(d): Compare the present value of economic profit in each of the next three years and the loss of $50,000 in the third year using 15% as the discount rate.
2.    The spreadsheet problem (b): Calculate a mean, …. to statistically describe the data of both variables, Time and Age.

Froeb et al. Chapter 3:

a.    Individual problems: 3-1 and 3-3.

Salvatore Chapter 3:

a.    Discussion Questions: 9.
b.    Problems: 1(a), 7, and 9.

Note:
1.    DQ9: Does maximum sales (revenue) equal maximum profit (see figure 3-4)?
2.    Revised P1(a): Derive the total-revenue, average-revenue, and marginal-revenue schedules from Q = 0 to Q = 4 by 1s.
Average revenue (AR) = total revenue (TR)/Q
Marginal revenue (MR) = change in total revenue/change in Q

For example:

Q    TR    AR    MR
2    14    7 (=14/2)
3    18    6 (=18/3)    4 (=(18-14)/(3-2)

3.    Revised P9: With the total-revenue schedule of Problem 1 and the total-cost schedule of Problem 7, show the profit-maximizing level of output (profit=TR-TC).

Froeb et al. Chapter 4:

a.    Individual problems: 4-5 and 4-6.

Salvatore Chapter 1 Spreadsheet Problem
Number    Time    Age
1    8.2    14
2    7.5    16
3    9.6    12
4    12.1    12
5    10.2    13
6    8.3    14
7    7.4    18
8    8.1    17
9    9.6    14
10    11.2    13

mean    9.2
median    9.0
mode    9.6
variance    2.5
s.d.    1.6
coefficient of variance    0.2
covariance    -2.4