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Hollywood screenwriters negotiate a new agreement with movie producers stipulating that they will receive 10% of the revenue from every video rental of a movie they authored. They have no such agreement for movies shown on on-demand television.
a) When the new writers’ agreement comes into effect, what will happen in the market for video rentals—that is, will supply or demand shift, and how? As a result, how will consumer surplus in the market for video rentals change?
b) Consumers consider video rentals and on-demand movies substitutable to some extent. When the new writers’ agreement comes into effect, what will happen in the market for on-demand movies—that is, will supply or demand shift, and how? As a result, how will producer surplus in the market for on-demand movies change? Illustrate with a diagram. Do you think the writers’ agreement will be popular with cable television companies that show on-demand movies?
Inflation during the 1970s was much higher than most people had expected when the decade began. How did this affect home-owners who obtained fixed-rate mortgages during the 1960's? How did it affect the banks that lent the money?
What effects would each of the following have on aggregate demand or aggregate supply? In each case use a diagram to show the expected effects on the equilibrium price level and the level of real output. Assume all other things remain constant.
Your company is interested in analyzing the behavior of interest rates and the models used to predict interest rates in the future. As an initial project in this area, you have been assigned the task of creating a presentation that will show the top ..
Suppose firm sets an entry fee plus per-unit price for each consume. It can tailor entry fee and per-unit price to individual consumer. Illustrate what are best (profit-maximizing) entry fees and per-unit prices for it to set. Illustrate what is t..
karens performance pizza is a small restraunt in ny that sells gluten free pizzas karens very tiny kitchen barely has enoug room for the three ovens in which her workers bake the pizzas karen signed a lease obligating her to pay the rent for the t..
Write down a formula that describes the marginal product of labor in the short run as a function of the amount of labor used.
Principal-agent problems:
Select an economic problem or theory and discuss how dummy variables could be applied. Determine the value that dummy variables would add to your analysis (think outside the box on this one – avoid obvious examples like gender, race, etc.).
In the economy of Wrexinton in 2008, consumption was $500, exports were $200, GDP was $1200, government purchases were $250, and investment was $300. What were Wrexingtons imports in 2008?
q1. illustrate the basis of tension between cooperation and self-interest in a market characterized by oligopoly. use
A descriptive essay on “is there a "free-rider" problem associated with public goods and services? How does government address this free-rider problem? What are the necessary ingredients for a nation to experience greater rates of economic growth, hi..
How does a government budget deficit affect the economy? Identify two periods in recent history in which the United States has run budget deficits. What were the reasons for the deficits during those time periods?
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