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Suppose that a firm cannot give up one input in exchange for the other and still maintain the same level of output. Calculate the elasticity of substitution in this case and elaborate on your answer.
Compute the second year's depreciation expense: 160,000 times 20% equals 32,000. Compute the first year's depreciation expense: 200,000 times 20% equals 40,000.
How does a firm then maximize its total revenue? Describe relationship of demand curve and total revenue, indicating in which of four types of market structure.
draw on the reservation prices provided in question 6 and assume mixed bundling.suppose the bundle price is set at 3
Assume that the aggregate demand curve is P=120 - Q, where P is price level and Q is real output. If the short-run aggregate supply curve
Early in our study of principal-agent relationships we used the example of shareholders as principals and management as their agent.
Two of the four market structures, pure competition and monopoly, were covered in unit two. The other two, oligopoly and monopolistic competition, are part of unit three. Make sure you don't confuse monopoly with monopolistic competition.
Discuss the importance of analyzing competition within an industry to better appeal to potential candidates. How can an organization use incentives to ensure it appeals to the employees it wants to hire?
Anna Chang is a sales agent for XYZ Company. She has an effort cost function of C = e2 and a reservation wage of $1,500. Her wage package is W = 1,500 + 0.2Q where the CEO sets the incentive at 0.2 and Q = 200e. Q is the output. If the CEO increases ..
Presume the foreign and domestic interest rates are both initially equal to 4%. Now suppose the foreign interest rate rises to 6%. Describe what effect this will have on the exchange rate. Also explain what should occur for the interest parity condit..
Suppose a single firm produces all of the output in a contestable market. The market inverse demand function is P = 350 -5Q, and the firm’s cost function is C(Q) = 8Q. Determine the firm’s equilibrium price and corresponding profits.
Is the equilibrium efficient? In your model, does there exist a Pareto efficient equilibrium outcome?
The manager of a department store wants to determine what proportions of people who enter the store use the store’s credit cards for their purchases. What size sample should be taken so that at 99% confidence, the error will not be more that 8%?
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