Economics of Enterprise Answers

Adam is the owner of a small grocery store in a busy section of Boulder, Colorado. Adam’s annual revenue is $200,000 and his total explicit cost (Adam pays himself an annual salary of $30,000) is $180,000 per year. A supermarket chain wants to hire Adam as its general manager for $60,000 per year. 

a. What is the opportunity cost to Adam of owning and managing the grocery store ? 

b. What is Adam’s accounting profit ? 

c. What is Adam’s economic profit ?

Over a month ago the government established a price ceiling for pork. Consequently, there is a shortage in the market due to this price control. Presently, the government wanted to increase the price ceiling for pork which may reduce the shortage in demand. 

1. Demonstrate and explain a graph the three changes in the price due to the price control of the government with no shift in demand and supply. The three price phases are before the price control, the first price control and the third price control.

2. Assign value in your graphs and compute the three consumer and sellers surplus. Is there a deadweight?

Please read this article to guide you:

https://www.philstar.com/headlines/2021/02/26/2080490/da-open-higher-pork-price-ceiling

Let assume that the table's data represent the production of orange versus apple on a Florida farm.

Combination Orange Apple

A 100 0

B 90 15

C 70 30

D 40 45

E 0 60

Compute the point advertising elasticity of demand (%ΔQX/%ΔA) of a medical supplier if the business spent P10,000 from the previous budget of P8,000 and the sales increased from P100,000 to P200,000. Interpret your answer.

Let demand equal: P = 10 – 0.2Qd. Supply is denoted as: P = 2 + 0.2Qs. Assume that Qd is quantity demanded and Qs is quantity supplied.

1. Suppose that each firm in a perfectly competitive market has a short-run total cost of TC = 75 + 500Q – 5Q2 + 0.5Q3, where MC = 500 – 10Q + 1.5Q2.

1. Calculate the output that minimizes the firm’s AVC.
2. What is the firm’s shutdown price?

In the light of prevalence of these practices, is resume inflation and deception okay? Is it okay up to a point as long as distortion does not get too big? Is a small amount of puffery on one's resume just expected as part of the game of getting a job and getting ahead? What would the controversial approach to business ethics say?

Is it proper for John Q. Expert to accept the offer? Why? Why not?

Is it appropriate for Councilman Lotsoland to offer the "all expenses paid" weekend? What factors make it acceptable or unacceptable?

What factors must John Q. Expert consider in his decision of whether or not to accept the complimentary weekend? Are there any conflicts of interest present that ought to be considered?