.png){kind=logo}
Copyright © 2025 Pearson Education, Inc.Solutions to Chapter 2 Problems
A Note To Instructors: Because of volatile energy prices in today's world, the instructor is encouraged to vary energy prices in affected problems (e.g. the price of a gallon of gasoline) plus and minus 50 percent and ask students to determine whether this range of prices changes the recommendation in the problem. This should make for stimulating in- class discussion of the results.
2-1 The total mileage driven would have to be specified (assumed) in addition to the variable cost of fuel per unit (e.g. $ per gallon). Also, the fixed cost of both engine blocks would need to be assumed. The efficiency of the traditional engine and the composite engine would also need to be specified 1 / 4
Copyright © 2025 Pearson Education, Inc.2-2 (a) 4 – sunk (b) 5 – opportunity (c) 3 – fixed (d) 2 – variable (e) 6 – incremental (f) 1 – recurring (g) 7 – direct (h) 8 – nonrecurring 2 / 4
Copyright © 2025 Pearson Education, Inc.2-3 (a) # cows = miles/day) (15days/year) 365( miles/year 000,000,1 = 182.6 or 183 cows
Annual cost = (1,000,000 miles/year)($10 / 60 miles) = $166,667 per year
(b) Annual cost of gasoline = 1,000,000 miles/year 30 miles/gallon × $4/gallon = $133,333 per year It would cost $33,334 more per year to fuel the fleet of cars with gasoline.
- / 4
Copyright © 2025 Pearson Education, Inc.2-4 Cost Site A Site B Rent = $5,000 = $100,000 Hauling (4)(200,000)($1.50) = $1,200,000 (3)(200,000)($1.50) = $900,000 Total $1,205,000 $1,000,000
Note that the revenue of $8.00/yd 3 is independent of the site selected. Thus, we can maximize profit by minimizing total cost. The solid waste site should be located in Site B.
- / 4
.png)