An owner of an apartment complex took out a mortgage to buy the complex. The amount of mortgage payment comes to $300 per apartment. Maintenance and utilities are $250 a month for an occupied apartment and zero for unoccupied apartment. If the local rents are lower than the owner expected, what is the lowest rent the owner should ever accept? 1. Consider the market for underground bunkers, Zombie movies have caused a spike in demand. Jennifer's construction company has built 50 bunkers so far this year at a total cost to the company of 58 million. If the company builds a 51 st bunker, its total cost will increase to $8.18 million. What is the marginal cost of the 51 bunker? 2. The following is the cost of Mr. Rogers farm in Illinois. Total Revenue: $280,000 in the year 2018. Do complete analyzes of his business and Find the results of accounting and economic profits of the farm. Make sure to fill out the table. Explain your findings and provide any recommendation you may have to Mr. Rogers? *VOT stands for the value of owner's time. 3. Marginal Analysis: Fill the following table and indicate what is the most profitable level of output. 3. Marginal Analysis: Fill the following table and indicate what is the most profitable level of output. 4. The fixed cost of the following table is $15. Redo the table assuming the fixed cost is S35. Then answer the following questions: a. Does the change in fixed costs affect marginal cost? b. Does it affect the optimal level of input? Here is the table: Output TR MR = P MC TVC AVC TC Prefit Create a new table and fill up to complete the problem and then answer questions a. and b. (see above). 5. Give examples (other than those in the text) of industries that fit, or approximate, the market structures of perfect competition, monopoly, oligopoly, and monopolistic competition. Two or three examples will be fine each. 2 | Page An owner of an apartment complex took out a mortgage to buy the complex. The amount of mortgage payment comes to $300 per apartment. Maintenance and utilities are $250 a month for an occupied apartment and zero for unoccupied apartment. If the local rents are lower than the owner expected, what is the lowest rent the owner should ever accept? 1. Consider the market for underground bunkers, Zombie movies have caused a spike in demand. Jennifer's construction company has built 50 bunkers so far this year at a total cost to the company of 58 million. If the company builds a 51 st bunker, its total cost will increase to $8.18 million. What is the marginal cost of the 51 bunker? 2. The following is the cost of Mr. Rogers farm in Illinois. Total Revenue: $280,000 in the year 2018. Do complete analyzes of his business and Find the results of accounting and economic profits of the farm. Make sure to fill out the table. Explain your findings and provide any recommendation you may have to Mr. Rogers? *VOT stands for the value of owner's time. 3. Marginal Analysis: Fill the following table and indicate what is the most profitable level of output. 3. Marginal Analysis: Fill the following table and indicate what is the most profitable level of output. 4. The fixed cost of the following table is $15. Redo the table assuming the fixed cost is S35. Then answer the following questions: a. Does the change in fixed costs affect marginal cost? b. Does it affect the optimal level of input? Here is the table: Output TR MR = P MC TVC AVC TC Prefit Create a new table and fill up to complete the problem and then answer questions a. and b. (see above). 5. Give examples (other than those in the text) of industries that fit, or approximate, the market structures of perfect competition, monopoly, oligopoly, and monopolistic competition. Two or three examples will be fine each. 2 | Page
