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Suppose a firm has the following demand equation: Qd = 1,000 – 3000 P + 10A Where QD = quantity demanded P = price (in dollars) A = advertising expenditure (in dollars) Assume P = $3.00 and A = $2,000 a. Suppose the firm dropped the price to $2.50. Would this be beneficial? Explain. Illustrate your answer with the use of a demand curve. (You can also use elasticity concept) b. Suppose the firm raised the price to $4.00 while increasing its advertising expenditure by $100. Would this be beneficial? Explain. (Hint: First construct the curve assuming A = $2,000. Then construct a new curve assuming A = $2,100)
Explain how a budget deficit might lead to an appreciating currency and a trade deficit. Explain the introduction of the foreign sector makes the fiscal policy tool of the budget deficit less effective in stimulating the open, as compared to the clos..
If a perfectly competitive firm raises its price, the quantity demanded of its product __________. The demand curve as perceived by a perfectly competitive firm is __________. Would raising the price for a product create a larger decline in quantity ..
What are some of the problems and challenges of the different types of taxes available to government? How do you think they could be resolved?
Suppose the government is considering the imposition of a unit tax to be levied on beer producers. The view of companies is that this is just one more cost for them to bear.
The paying of a cash dividend causes the firms
Here are too few stars to fully staff every team, but there are enough for a few to be on every team if an owner decided to hire them.
List and describe the four types of unemployment. Using the expenditure approach, give an equation for GDP. Now explain it. If the CPI for 2006 was 170 and the CPI for 2007 is 204, what is the current inflation rate?
There are two excavators to choose from, A and B: The capital cost tor Excavator A is $150k, runs for 4 years and the maintenance costs are $20K per year. The capital cost for Excavator B is $150k, runs tor 3 years and the maintenance costs are $15k ..
Compute the stock's current yield, capital-gains yield, and the return. Show your work for three separate calculations.
Discuss specific changes in supply and demand. Examine prior government policies and legislation that exacerbated the impact of the shocks.
Assume that the treasury is currently running large surpluses (tax collections exceed new government spending). On a S/D diagram show the effect on Treasury Bond markets of using these surpluses to buy back outstanding treasury securities and reduce ..
Should companies have a big role in improving the world? Do you think the pharmaceutical businesses have a social responsibility to make drugs that will combat diseases that are a result of poor living conditions, even though profits will be limited?..
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