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Your product fails about 2% of the time, on average. Some customers purchase the extended warranty you offer in which you will replace the product if it fails. Would you want to price the extended warranty at 2% of the product price? Discuss both moral hazard and adverse selection issues.
q.the long-run cost function for leanns telecommunication firm is cq 0.03q2. a local telecommunication tax of 0.01 has
Explain how does monetary policy work to close an inflationary and recessionary gap using the keynesians model and what is the link.
You are the manager of a small pharmaceutical company that received a patent on a new drug three years ago. Despite strong sales ($200 million last year) and a low marginal cost of producing the product ($0.45 per pill), your company has yet to show ..
A $150 tax levied on the producer of cars will cause:
At the end of 2012 the prestigious Rolex watch manufacturer had in inventory of watches worth $725 dollars. In 2013, Rolex produced $333 worth of watches and sold $260. What was the change in inventories in 2013? (hint: careful with the signs, rememb..
Wooldridge Problem 4.6 In section 4.5, we used as an example testing the rationality of assessments of housing prices. There, we used a log-log model in price and assess [see equation (4.47)]. Here, we use a level-level formulation. i. In the simple ..
What does the term "INTEREST RATE INVERSION" refer to? For the past several years, the Federal Reserve System has forced short-term interest rates to nearly zero. Why has it not been able to do the same for long-term interest rates? Explain
This will provide insight into the idea of the optimal number of workers and the value of the marginal product of labor. If wages in the restaurant is $9.00 per hour and the price of a Hamburger is $4.00 and the production function for the workers is..
Is the online book retail industry qualified as a perfectly competitive market by the four market characteristics listed in the lecture note? If not, what characteristic(s) is (are) not met? There are so many companies having websites to sell their p..
How much profit does an unregulated monopolist earn? How much profit would be earned if MC pricing were imposed?
In the long run for a monopolistically competitive firm:
Interpret the R2. (b) Interpret the coefficient on All-Star.
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