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A firm produces one million units per year. The overhead costs (building maintenance, CEO salary, head office personnel, etc.) come to $1 million per year. The direct costs (raw materials and blue-collar labor) are $1 per unit, so $1 million per year. This means that the total costs for the firm are $2 million, and the average cost per unit of output is $2. The firm sells the units at a price of $2.20 per unit, so it makes $200 thousand per year in profit. The director of marketing has just received an order for an addition 1 million units per year at a price of $1.30 per unit. The firm could satisfy the order by adding a second shift, so no additional overhead. The firm would have to double the amount of raw materials and blue-collar labor. Should the firm accept the order? Please explain.
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Re-run the regression in Table using In INC( -1) as a regressor in place ofLC( -1), and compare the results with those in Table. What difference, if any.
What is the optimal level of output for the firm and how much profit will it earn? What are the weekly wages of each worker?
Malaria Eradication Back on the Table In response to the Gates Malaria Forum in October 2007, countries are debating the pros and cons of eradication.
Governments often adopt certain policies in order to promote desired behavior among their citizens. For each of the following policies.
Immigration has both positive and negative implications for the United States' economy. What is your opinion regarding immigration as it pertains to the factor endowment model of Heckscher and Olin? Does immigration hinder or facilitate internati..
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How would population growth effect the dynamically efficient allocation, given the model in the second period has a higher demand for the depletable resource. What effect would the addition of population growth have on the efficient allocation.
you need to responses to this questions about acawhat provisions of aca are intended to reduce or increase directly the
For each of the following statements, indicate whether it is true, false, or uncertain and EXPLAIN WHY.
There are many types of 'large scale' economic shocks. Some of these may be discussed during the course of this class while others will note.
Assume you were appointed economic adviser to a less developed country in Africa. The country seeks to encourage capital formation and wants to raise the rate of saving of its own residents and encourage foreigners to invest in their country.
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