6 problems

Project Description:

6-2) the oceanic pacific fleet decided to use the pole-in-line fishing instead of using nets because different sea creatures get caught in the nets. united states canneries will no longer accept tuna caught in nets. ocean pacific decided to conduct a series of experiments to determine the amount of tuna that could be caught with different crew sizes. the results are as follows:

number of fishermen daily tuna catch/lbs
0 0
1 50
2 110
3 300
4 450
5 590
6 665
7 700
8 725
9 710
a) determine the point at which diminishing return occurs.
b) indicate the points that delineate the three stages of production.
c) suppose the market price of tuna is how many fishermen should the company use if the daily wage rate is $100?
d) suppose a glut in the market for tuna causes the price to fall to $2.75/lb. what effect would this have on the number of fishermen used per boat?
suppose the price rose to $5.00/lb. what effect would this have on its hiring decision?

6-5) an american company that sells consumer electronics products has manufacturing facilities in mexico, taiwan, and canada. the average hourly wage, output, and annual overhead cost for each site are as follows:

mexico taiwan canada
hourly wage rate $1.50 $3.00 $6.00
output per person 10 18 20
fixed overhead cost $150,000 $90,000 $110,000
a) given these figures, is the firm currently allocating its production resources optimally?
if not, what should it do? (consider output per person as a proxy for marginal product).
b) suppose the firm wants to consolidate all its manufacturing into one facility. where should it locate and why.
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