# W. Cris Lewis MANAGERIAL ECONOMICS (Economics 4010) Business 302A T-TH 12:00-1:15 pm (Business 209) clewis@econ.usu.

edu (CRN #10732) Office Hours: T-Th 10:00 a.m.–11:30 a.m. and by appointment

Spring 2007

Text: H. Craig Petersen and W. Cris Lewis, Managerial Economics, 4th edition (New York: MacMillan) 1999 (Required) Workbook: H. Craig Petersen and W. Cris Lewis, Managerial Economics: Study Guide w/Software (New York: MacMillan) 1999 (Not required but useful and on reserve in the library). Course Overview: Chapters:

Homework Assignments—Problems:

539.000(6.000(0.PV =+ 1.239) fromcalculator orTable And the final answer is: PV = \$8. .145)10.

economagic.com http://www.pathfinder. stock quotes) (economic data. SOLUTION TO A SYSTEM OF LINEAR EQUATIONS. 2.ecomicsearch. by Petersen and Lewis. MEAN. 8.com http://quote.msn. stock quotes) (internet site designed specifically for economics students.wsm. the student can concentrate on selecting the proper method for analysis and interpreting results generated by TOOLS. PRESENT OR FUTURE VALUE FOR TIME VALUE OF MONEY PROBLEMS. AND THE R2 FOR MULTIPLE REGRESSION PROBLEMS. the TOOLS program will calculate the following: 1. Specifically.com/money http://www.com http://www. charts) (financial news. includes economic data. BENEFIT/COST RATIO.com/ What’s There: (financial news. EXPECTED VALUE. STANDARD DEVIATION.html http://www. AND INTERNAL RATE OF RETURN FOR CAPITAL BUDGETING PROBLEMS.com/index. SOLUTION AND SHADOW PRICES FOR LINEAR PROGRAMMING PROBLEMS.bloomberg. NET PRESENT VALUE. Thus. AND THE COEFFICIENT OF VARIATION FOR PROBLEMS THAT INVOLVE PROBABILITY DISTRIBUTIONS. stock quotes) (financial news. 9. MEDIAN. AND THE FREQUENCY DISTRIBUTION OF A DATA SET. 6. ROOTS OF A QUADRATIC EQUATION. STANDARD DEVIATION. stock quotes) (financial news. job information.USING THE “TOOLS” SOFTWARE PROGRAM TOOLS can be used to solve many of the problems discussed in Managerial Economics. tutorial system) . 10. ELEMENTS OF DIRECT AND INDIRECT REQUIREMENTS MATRIX AND EFFECTS OF CHANGES IN FINAL DEMAND FOR INPUT/OUTPUT PROBLEMS. 3. THE OPTIMAL SMOOTHING CONSTANT FOR EXPONENTIAL SMOOTHING. Useful Web Sites: Address http://investor. ALSO. COEFFICIENTS. 7. 4. CONSTANT RATE OF CHANGE AND CONSTANT PERCENTAGE RATE OF CHANGE FOR TREND PROJECTION. 5. t-STATISTICS. TOOLS frees the user from the need to make the tedious calculations necessary to solve some managerial economics problems.

a.500 Opportunity cost: Β = -5. \$50. Q = 5 2-10.46 4-11. 25 5-16. 6. 2.500 3.35 b.539 1A-7. Q = 10P-1. a.8x2 + 16) c. QΝ = 0. 119. AC = 1000/Q + 10 + 0. z = 2 2A-6.700. t = 15 4-2. \$89.12)/(x4 .3 .900. -0.18.0.000. 6.1.000. P = 25. x = 2.818 d. a. -0.04 million 5-4. b. (-3x2 . b. -0.88 4-6.073.714.0 3-9. = -1. a. 343. 2.14. 0 < Q < 20 b. 122. P < 20.205. 21.55 5-12.42 4-15.667 2A-7. GPA = 2. Q = 20 127. \$189. Chapter 1 1-1. Q = 50.6 d. a. a. -0.463 b.6 c.058)t 5-5.000 1-3. -1.8 c.520 1A-6. -0. 20X1 + 2X2. b. = 0. -0.600 b. 100. 1 3-14.955 Chapter 2 2-1. TR = 10Q . 201. S = 15.5 e. a. \$6.245 (don’t implement plan) 1A-1. -1 Chapter 4 b. \$263. = 158.1Q . TR = 250.0.2739.5I3 4-4. 5K-0. 2. Q = 290–6.95.189. Q = 3-4. b.359. 6X + 2Z. Q = 5.000 b. t = -11 4-8. 100 P1 -1.2.0. 6. 2. -4.00024Q2 Chapter 3 3-1. -0. QD = 50. R2 = 0. Q = 5. 71. 5. Profit = -9. Q = 250.60.300. Es = 0. YΝ = 0. \$4mm c.356 c.8Q + 0. a. 4.2P 3-3.45 c.37 1A-2. Q = 20 .244.07 . 2X + 2Z b.600. = 1. 94.000 c.55 2-13.055 Chapter 5 5-2.5. 37.3Q . = 0. If IQ = 120. -0. 3.875 5-14. Weekly income Maintenance crew: \$420 Pizza Shop: \$250 1A-3. a.67 3-8. Q = 5.945. 7.8 c. AR = 100 . \$7.000.000 b.5.508. Q2 = 12. a.50 b.67 2-14. a.14.211 Age + 2. b.818 b. Profit = 42. 9. 0. 2X1 + 6X2 2A-3. P2 = 47. 1976: 5. b.250. Q = 5 b. 4x3 + 6x2 + 2x . -0. 0. -0. = 0.500 c.674 2-12. I = -7. Historic cost: Β = 7.500.5P. a. b.369.0. a. 3x2 + 4X + 25 2A-2.8 2-15. 36 . P = 10 . \$6. Q = 105 2-6. 57% increase 3-20.250. Q1 = 25. Q = 1.000. 0.02k d.5 d. P = 5. b. No.000 5-7.32.282 c. a. 7. a.000. b. 44.3467 .000 Econ. a.618.501. a. Yes.64 + 7. QD = 75. constant rate of change.7 b.3.5 3-5. 22 3-19.01Q.820 II. 1. P = 28. P = 19.16x .058 d. 17 c. NPV = -167.5L0. )TR = -1.571. -0. 37. Y = 10. 0.400 c.54 5-13. 85 b. 6. = 1. Q = 24. 14mm 5-15: a.2 P21.12(1.282 d. 2.000.800.997.50 b.332 b.05. \$106. Q = 50 2A-1. -144. A = 5 2A-5. P = 9.03 million 5-3.33% b. a. TC = 10.142 meters or 3.000. a. Q = 25 2-7.44.17.82.024 Exp b.42 1992: 6. 620. 2. b.080 3. 2.245 ED + 1. Q = 1.095 4-12.4Q2 + 0. P = 20 3-21.000 5-6.27. 2.07 3-10. Q < 5 c.20 3-12. γ = 0 3-13. 0.25. -4 b. a.9419 4-7. 24. -0. 97. AΒ = 50 . \$6. 6. 85.20 c.0 b. YΟ = 0 b.0. 1. \$102. a.4P 2A-4. Acct.0.Selected check figures for Petersen & Lewis.37 2-5. QS = 35 d. b. MC = 10. QS = 60 c.51 # # 77.6P 3-6. b.93. b.500 1-2.000 c. 20. 25. a.43. 49. 0. a. 4th ed.5Q2 3-2. a.190 1A-4. a. 65.5Q b. a. a. -0. 0. 0.5 4-14. b. a.1000/Q 2-9.250 b. a. Q = 55 1A-5. R2 = 0. 0. I: 4.600 3-11.15. b. No 2-8.329 3-7.000 b. ˆ a b s ˆ i ˆ ˆ a b Q 4-1. -1.00012Q3.3% 5-10. a. 28.Q.

Β = 4. 0. 0.83 . Β = 4. B = 5. a. 1.667 c. a.642. MPL = 16. No 9-4. K = 80 .3 6-19. Min. Cost = \$72.3. Econ: 13. AC = . Q = 32.50 9-14. P = 3 b.8. w = 80 c. 2 6-13. Q = 666. P = 3.211 8-16. P = 980 Chapter 10 9-21. L = 3 is better 6-2. 1. DWL = 312.25.421. b. P = 600.333. a. L = 5 d.5 9-7. Q = 10.500 6-12. a. 2. No b. AC = 0. b. P = 12. R1 = 26. 1. 4. a = 0. L = 3. 180. 625 9-9. a. P = 12. K = 4.8 7-17. a. 2. K = 200 .94 b.333. P = \$143 10-6. a. 25. Β = 990. Q = 66.000 b. QA = 20. c. A = 10 10-11. K = 200 . Β = 0 10-3.800 8-7. c. a.18. 100 b. P = 200 10-12. q1 = q2 = 400.000. 50 10-10. b.462 b.57. English: 13.500. Add Flight 7-18. 32.000 b. b.1 6-21.0. P = 400 b.000. P = 333. 220.207 6-10. a: K = 4L. 0.633.786 7-6. L = 400 6-6. b. a. H = 1. Profit max for Q is 30. L = 5. a. C = 0. CA = 0.33. QB = 40. Q = 18.996 b. V = \$9. q = 10.4L.3 c. Q = 12. P = 20 9-11. 127. Q = 75. Q = 5 not 25. P = 500 c. 0.470 9-18.424 Chapter 7 7-3. 2. 2. 10 7-12. C3 = 116.190 c. Q = 64 9-16. 50.667. 186. CB = 1. a. a. a.5. \$1. a. Q = 20 7-4. Q = 15 c. Q = 16. K = 3. a.50 7-10. 2. R2 = 0. Q = 62. Q = 63.11 7-21. MPK = 4. 20 9-13. a. )Β = 10.21 10-5. a. a. L = 4. No 6-4. Reduce output 9-5. b.0. Β = 6. Q = 38. 912. Β = 0 10-4. K = 0. a.405 7-8. substitute BKs for CPAs 6-7.44 c. F = 0.7. a. 4.600 b. P = 0. AC = 320. a. Q = 20.50 b.000 9-2. Q = 40/3 b. 40. -22. AC = 5 9-15.1L b. Q = 1. b.333 8-12. R3 = 0 Z = \$9. 50 9-8. cost = \$870 c. 0.50. Q = 30 10-8. Qb = 2.152.562. 62.000 8-11. 1.581 7-7. Β = 0 9-17. Q = 20.31 b.6mm b. K = 200. a. Q = 10 b. A = 23 . E(Β) = 0 10-7. Cost = \$1.015Q + 0.7. b. Q = 20.4. 6-17. 200 6-18. a. a.3 10-9.650. P = 400.000 7-19.01. 0.7. 2. Qa = 2.15. PE: 5. K = 133.2 6-11. 16. c.7. 0.000 9-3. Β = 80 8-13.515. P = 320 10-1. Q = 6 9-12. a. 10-2.7 b.33 b. 15 d.75 b.000039Q2 Chapter 8 7-16. Physics: 11. 66. Increasing RTS b.50 9-6. a. a. Q = 50 b. V = 250. c. a. a. 500. b. a. Q = 10 b. K = 3 6-3. 666.800. AVC = 119 b. b. b.538.7. 1. P = 14.67. Β = -31. K = 2. E(Β) = 116. P = 10.513. P = 71. Q = 857. 1. P = 340 c.67 7-14. b: K = L 6-16. b. a.67 B B 8-4. P = 1. K = 14.208 8-14. K = 80 6-9.000. L = 11. 0.000 8-17. Q = 1. 1. b. C1 = C2 = 0.4L.667 b. b. P = 133. M = 10. K = 8. Yes b. a.67. a.52% Chapter 9 9-1. a. 50 7-9.Chapter 6 6-1. Z = 200.75 b.97.09 b. a.00017Q 8-3. b. P = 15.000 7-11.66 L0.557 . P = 60 b. P = 178.67.01 8-15.25 7-20. a. a.8L b. Β = 4.50 8-6. AC = 9 c. no limit on output b. AC 1. Β = 200 b.333 c.600 or 11.7. a. a. 416. 1.500 6-22.4K0.

5. a. P = 4. QS = 13. 224. 5. P = 0. 6.000 14-14. Unaffected 16-3. P = 120 B 12-5. -241.562 AC900 = 2.500. 8. 8. a. 158 Chapter 15 15-1. 100. W = 10 c. Β = 37 12-6.000 c. 17.000 b.880 b. No 14-2.50 b.117 -48. NPV = -25.0 m. W = 4.90. 45.235 b. Yes b. L = 2. q1 = q2 = 8a. a. Yes.25 or 25% B 12-13. 88. 195. 22.989 13-6. 248.92% 16-2. a. \$398. W = 8. 25%.8 million 15-2. 4.86.000. b.66 16-7.000 14-15. 2.5% Chapter 12 12-1. 784.94.865 13-10. 0.35 14-3. 0.202.5.425 million. Β = 330 12-11.3. 40 c.840 c. 6. QT = 15 b. 0. PN = 20 Chapter 13 13-1. a. -14. Q = 8.83 Chapter 14 14-1.65.5.499. 31. 26.38 14-13. Qy = 2. 30. t = 6 16-11. 28.041 c. L = 9.635 million. \$6.28. for U = W2 take game II d. 9. 1. 379.57mm 13-2.08 c. a.086. W = 99. 0.67 b. 10% 15-12. 3. 15% c.896. 3. w = 15 13-8.4% b.13.6% 15-5. a.000 c.830. 6.82 . b. 4. 1. W = 2.85 b. 5.03% Chapter 16 16-1. K = 0. 50 15-3.029. 11. P2 = 6. W = 178 14-12.080.2. QT = 16. a. PV = 1. 21.2% 8. P = 3.578 12.805.500. b. 4.000. 355.900. \$90 14-9.6 c. 21. 18%. Q = 233.532 16-8. 1 11-12. 4. AC800 = 2.000. 301. 4. 0. b. Β = 255 without bundling and \$270 with bundling. 240. Q2 = 8. 13% 15-7. 992. QS = 11. C 11-7. QD = 7. W = 10 b.2 13-7.8. 102. all except A b. b. a.764. 15. a. QF = 500 12-2. 792. and A c. B.024. Q = 7.661 5. 3.07. New project 15-13.86.69.261. PU = 21. 13%.220.800 b. a.25.60% 15-15.42 b.2% 13-3. 244.27 14-11.25% b.500.66.5L 16-5.1. b. Rent = 600.000 12-9.546. a. 0.33 b. \$6. QU = 22.5. PJ = 16. 902.95. a.3.50.4333 12-4. b. D. P = 50 b. a. a. 1. a. QD = 7. 6. PB = 20.000. 718.Chapter 11 11-2.14 12-7.1 b. a. a. 1.9.91. PV = 813.000. PF = 0. \$432.75 b. P = 600 c. 9.50 12-10. Difference = 1. a. a. E. Q = 3. K = 0.7 c.15 15-4. W = 199.000.34 14-7.6.5. No 12-3.209. 20. QN = 10. 7.6. a. 42. 1. QB = 2.9.090. b.3 million 15-6.91 b. 0. 6.81. 19. B and E b. For U = ln W take game I. 3. 10. Β = 24. \$60 14-18.90 14-6. 41.2. PP = 1. 7. 17. 60 c. 117. L = 15. 0.232. 0.000. 272. Increasing b. P1 = 3. a. 27. 164. 21. a.97 18.000 13-9.4% 16. Q = 46. a.92 3.3 11-13. b.977. Q1 = 5. 12-12. 3.442 11-5.600. 0. 20. 11. QS = 10.914. 7.95. 30. Β = 49 b. 72. Qx = .984 12-14.4 c. a. P = 33a 11-11.27 14-8. b. PF = 0. 6. r = .48. a. Β = 272. 6. a. 1.267 b.5 b. a. Q = 13. 23. a. a.175. No. 7.26. a. 22.5L 15-14. 3. b. 52. a.669. QJ = 20. 30. Β = 24. 40. c. L = 2. 19.51% 14.72 b.46 14-4.0%. 1. 3. 1.77% 15-11. Β = -19.5 11-6. 7.

000 b. P = 17. Q = 20.Chapter 18 18-1. No change b. . Q = 260 18-4. P = 17.5 c. Q = 40. TR = 600. a. q = 37. P = 50 18-9. P = 80 b.754 using double declining balance method.2. P = 80 d. PV is increased by 1. a.90. P = 8.35 18-3. a. Q = 252 18. Q = 50.

115.Economics 4010 Tools Software Information A. and 120 in the Business Building: Start 9 All Programs 9 Dept Apps 9 Economics 9 Tools 9 B. To download from the Internet.com/petersen and follow the instructions. go to: www. To download in laboratory My Computer 9 I: Drive 9 Tools 9 New Tools 9 Student Disks β Disk 1 9 File & Folder Tasks Copy this folder ⎯ Disk 2 9 File & Folder Tasks Copy this Folder C. . To execute from any labs 113. 118.prenhall.