Production, Costs, and Profits; How should the manager decide which alternative to pursue? What would happen if too much labor is hired without an addition to capital? Explain using economic terms. custom essay

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1. Business is booming at a local fast food restaurant. It is contemplating adding a new grill and french fry machine, but the day supervisor suggests simply adding more workers. How should the manager decide which alternative to pursue? What would happen if too much labor is hired without an addition to capital? Explain using economic terms.

2. Read the following short article and answer the question:

Vargas, L. (2001). ?Maquiladoras: Impact on Texas Border Cities,? in The Border Economy, Federal Reserve Bank of Dallas. Retrieved on December 2, 2011 from: https://www.dallasfed.org/assets/documents/research/border/tbe_vargas.pdf

How does this article apply the marginal decision rule to the problem of choosing the mix of factors or production (capital intensive vs. labor intensive methods of production)? How do maquiladoras benefit the U.S. economy?

3. Read the Case in Point: Competition in the Market for Generic Prescription Drugs in section 3 of Chapter 9 and answer the question.

Why have generic drug companies been so successful? What economic and/or political conditions would cause a generic drug maker to go out of business?

4. What is the difference between the short-run and the long-run for a perfectly competitive firm in terms of costs and profits? Explain why a perfectly competitive firm may continue to operate in the short-run even with a loss of profits.

Case Assignment Expectations:

Use concepts from the modular background readings as well as any good quality resources you can find from the cyberlibrary or other internet search engines. Pleas be sure to cite all sources within the text and provide a reference list at the end of the paper.

Length: 4-5 pages double spaced and typed.

The following items will be assessed in particular:

Your ability to understand the relationship between costs and production.

Some in-text references to the modular background material (APA formatting not required).

The essay should address each element of the assignment. Remember to support your answers with solid references including the case readings.

Case Assignment Expectations:

Use concepts from the modular background readings as well as any good quality resources you can find from the cyberlibrary or other internet search engines. Pleas be sure to cite all sources within the text and provide a reference list at the end of the paper.

Length: 4-5 pages double spaced and typed.

The following items will be assessed in particular:

Your ability to understand the costs and production process of a firm in a perfectly competitive market.

Some in-text references to the modular background material (APA formatting not required).

The assignment should address each question of the assignment. Remember to support your answers with solid references including the case readings.

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