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Many states give companies with an investment tax credit that effectively decrease the value of capital. In theory these credits are designed to stimulate new investment and thus create jobs. Critics have argued that if there are strong factor substitution effects, these subsides can reduce employment in the state. Describe their argument.
Illustrate why is strategic interdependence important for the market structure of oligopolies. What happens in the market for oranges if there is a hurricane that destroys the orange crop.
Explain Comparative Advantage, specialization, and trade support by example. Illustrate the invisible hand theorem supported by example.
If my comapny operates in a competitive market and competes with many other domestic and foreign firms.
Now assume that an unusual shift of the Gulf Stream leads to an unseasonably cold summer in Europe, destroying much of the grape harvest there.
Assume that the soft coal industry is a competitive industry and it is in long run equilibrium. Now assume that the firms in the industry form a cartel.
Answer the following Multiple choice questions.
Illustarte what are the main costs of production for the good or service your organization supplies. Breakdown the costs from the largest to the smallest.
Assume labor's share of GDP is 70% and capital's is 30%, real GDP is growing at a rate of 4 percent a year, the labor force is growing at 2 percent, and the capital stock is growing at 3%.
What price should DD set to maximize profits? What would output be if DD acted like a perfect competitor and set P = MC?
A price-discriminating monopolist of the 3 rd degree sells output in 3 different markets. Some, but not all pairs on the 3 linear market demand curves are given below.
Explain how many baseball jerseys will you sell in Los Angeles and how many in Brooklyn. What will be the price of your jersey in Los Angeles and what will be the price in Brooklyn.
Discuss some polices the United States government could take to increase United States economic growth? Name two or three and describe why these would encourage growth.
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