Homework Answers
The production should cover the marginal cost so as to induce production activity if it would lead to negative profit. So for three barallels of oil, minimum price should be of $10
Pump 1 should produce 3 barallels of oil and pump 2 should produce 4 barallels of oil, based on lower marginal cost values
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1 point Oil Pump One Quantity Marginal (Barrels of Oil) Cost Oil Pump Two Quantity Marginal...
1) Suppose the Marginal Benefit and Marginal Cost for crude oil at any given period is: ...
1) Suppose the Marginal Benefit and Marginal Cost for crude oil at any given period is: M B = 159 − 2.1 Q a n d M C = 36 + 0.9 Q Where price is measured in dollars and quantity is measured in barrels. The total oil reserve is 50 tons. What is the Optimal barrels of oil that should be extracted in the current period (suppose we don’t need to be concerned with any future periods) 2) Now,...
Problem 4 (15 Points) An oil refining company can purchase crude oil from 2 countries: Kuwait and Canada. One barrel of crude oil yields useable gasoline, jet fuel, and lubricant, in barrels, accordi...
Problem 4 (15 Points) An oil refining company can purchase crude oil from 2 countries: Kuwait and Canada. One barrel of crude oil yields useable gasoline, jet fuel, and lubricant, in barrels, according to the following table (there is a 10% loss due to waste in the refining process): Product Yield (in barrels) Kuwait Canada 0.3 0.4 0.2 0.4 0.2 0.3 Gasoline Jet Fuel Lubricant Kuwait can offer up to 9000 barrels of crude oil at a cost of $20...
Suppose that Greece and Switzerland both produce oil and olives. Greece's opportunity cost of producing a crate of olives is 5 barrels of oil
Suppose that Greece and Switzerland both produce oil and olives. Greece's opportunity cost of producing a crate of olives is 5 barrels of oil, while Switzerland's opportunity cost of producing a crate of olives is 10 barrels of oil. By comparing the opportunity cost of producing olives in the two countries, you can tell that _______ has a comparative advantage in the production of olives, and _______ has a comparative advantage in the production of oil. Suppose that Greece and Switzerland consider trading olives...
Question 19 (1 point) Consider Iran and Iraq and their production of oil and olive oil....
Question 19 (1 point) Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates indicate that in July 2012. Iran produced about 4.1 million barrels of oil per day and Irag produced about 3.2 million barrels of oil per day, making them the second- and third-largest oil producers in OPEC, behind Saudi Arabia (and the 4th and 7th largest oil producing countries in the world). Suppose that Iran and Iraq both produce barrels of...
Quantity Marginal Cost The table on the night shows the marginal cost schedule for a single...
Quantity Marginal Cost The table on the night shows the marginal cost schedule for a single firm. Assume the supply curve is discrete Given a market price of $4.00, calculate the producer surplus. PS = $ (enter your answer to the nearest penny)
An oil well cost $2,030,000 and is calculated to hold 350,000 barrels of oil. There is...
An oil well cost $2,030,000 and is calculated to hold 350,000 barrels of oil. There is no residual value. Which journal entry is needed to record the expense for the extraction of 47,000 barrels of oil during the year? All 47,000 barrels were sold during the year. (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) 272,600 272,600 272,600 272,600 O A. Depletion Expense - Oil Reserve Oil Revenue O B. Cost of...
12.10. Suppose that the total market demand for crude oil is given by Qp70,000 - 2,000...
12.10. Suppose that the total market demand for crude oil is given by Qp70,000 - 2,000 P, where Qp is the quantity of oil in thousands of barrels per year and P is the dollar price per barrel. Suppose also that there are 1,000 identical small producers of crude oil, each with marginal costs given by MC = q+5, where q is the output of the typical firm a. Assuming that each small oil producer acts as a price taker,...
Suppose that a country imports 2 billion barrels of crude oil per year and domestically produces...
Suppose that a country imports 2 billion barrels of crude oil per year and domestically produces another 4 billion barrels of crude oil per year. All the domestic production is consumed by domestic consumers (i.e. there are no exportations). The world price of crude oil is $80 per barrel. Assuming linear demand and supply schedules, economists estimate the price elasticity of domestic supply to be 0.3 and the price elasticity of domestic demand to be -0.15 at the current equilibrium....
Quantity (gallons) Total Cost ($) Average Total Marginal Cost Cost ($) ($/gallon) 0 9 1 10...
Quantity (gallons) Total Cost ($) Average Total Marginal Cost Cost ($) ($/gallon) 0 9 1 10 2 13 3 18 4 25 5 34 a. Compute each producer's marginal cost and average total cost for 1 to 5 gallons. b. The price of a gallon of milk is now $10. How many gallons are sold? How many gallons does each producer make? How many producers are there? How much profit does each producer earn? c. Is the situation described in...
Suppose that Greece and Germany both produce oil and cheese. Greece's opportunity cost of producing a...
Suppose that Greece and Germany both produce oil and cheese. Greece's opportunity cost of producing a pound of cheese is 3 barrels of oil while Germany's opportunity cost of producing a pound of cheese is 11 barrels of oil. By comparing the opportunity cost of producing cheese in the two countries, you can tell that has a comparative advantage in the has a comparative advantage in the production of oil. production of cheese and Suppose that Greece and Germany consider...
Problem 4 (15 Points) An oil refining company can purchase crude oil from 2 countries: Kuwait and Canada. One barrel of crude oil yields useable gasoline, jet fuel, and lubricant, in barrels, according to the following table (there is a 10% loss due to waste in the refining process): Product Yield (in barrels) Kuwait Canada 0.3 0.4 0.2 0.4 0.2 0.3 Gasoline Jet Fuel Lubricant Kuwait can offer up to 9000 barrels of crude oil at a cost of $20...
Question 19 (1 point) Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates indicate that in July 2012. Iran produced about 4.1 million barrels of oil per day and Irag produced about 3.2 million barrels of oil per day, making them the second- and third-largest oil producers in OPEC, behind Saudi Arabia (and the 4th and 7th largest oil producing countries in the world). Suppose that Iran and Iraq both produce barrels of...
Quantity Marginal Cost The table on the night shows the marginal cost schedule for a single firm. Assume the supply curve is discrete Given a market price of $4.00, calculate the producer surplus. PS = $ (enter your answer to the nearest penny)
An oil well cost $2,030,000 and is calculated to hold 350,000 barrels of oil. There is no residual value. Which journal entry is needed to record the expense for the extraction of 47,000 barrels of oil during the year? All 47,000 barrels were sold during the year. (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) 272,600 272,600 272,600 272,600 O A. Depletion Expense - Oil Reserve Oil Revenue O B. Cost of...
12.10. Suppose that the total market demand for crude oil is given by Qp70,000 - 2,000 P, where Qp is the quantity of oil in thousands of barrels per year and P is the dollar price per barrel. Suppose also that there are 1,000 identical small producers of crude oil, each with marginal costs given by MC = q+5, where q is the output of the typical firm a. Assuming that each small oil producer acts as a price taker,...
Quantity (gallons) Total Cost ($) Average Total Marginal Cost Cost ($) ($/gallon) 0 9 1 10 2 13 3 18 4 25 5 34 a. Compute each producer's marginal cost and average total cost for 1 to 5 gallons. b. The price of a gallon of milk is now $10. How many gallons are sold? How many gallons does each producer make? How many producers are there? How much profit does each producer earn? c. Is the situation described in...
Suppose that Greece and Germany both produce oil and cheese. Greece's opportunity cost of producing a pound of cheese is 3 barrels of oil while Germany's opportunity cost of producing a pound of cheese is 11 barrels of oil. By comparing the opportunity cost of producing cheese in the two countries, you can tell that has a comparative advantage in the has a comparative advantage in the production of oil. production of cheese and Suppose that Greece and Germany consider...
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