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An elderly physician has built up his own practice into a quite valuable business. Now that he is thinking of retiring, he wants to take on a partner to learn the business and eventually buy the practice in three years. Her compensation will be a salary plus 25% of the profits if they are below the historical average and 50% for any increase above the historical average. The eventual purchase price for the practice will be 5 times the average profits over the three years. Discuss the plusses and minuses of this contract with respect to efficiency aspects and transfer of the business to the new partner. Do you think the incentives of the buyer and seller aligned?
The number of taxicabs in Motorville and the taxicab fares are regulated. The fare currently charged is $5 a ride. Motorville taxicab drivers want to obtain government's permission.
Illustrate what is the difference among a command economy also a market economy.
A monopoly market is characterized by the inverse demand curve P = 1,200 40Q and a constant marginal cost of $200. If the marginal cost of production rises to $400, what happens to the profit-maximizing price and output level?
Select an asset of your choice. For example you may select an appliance in your home, office, or in another place that have been in use for many years and you are thinking is time to replace it by a new one. After selecting the defender equipment and..
Explain how the strength of the economy as a whole could affect the marginal benefits and the marginal costs associated with a decision to purchase a home.
Explain why most market labor supply curves slope upward and to the right, even though individual labor supply curves are presumed to be backward-bending. How does the height of a market labor supply curve relate to the concept of opportunity cost?
Fill in the column "Society's willingness to pay." Then draw a graph of society's demand for the public good.
Sterling, Inc. is a manufacturer of state-of-the-art computers. For the past ten years, Sterling has acquired all of its microchips from NoBugs Corporation, the only producer of chips meeting Sterling's high specifications. Write a discussion of the ..
q1. the price of a laptop increases by 20 and there is a 40 drop in the quantity demanded. the price of a pack of
What does equilibrium GDP means? How net exports affect aggregate expenditure in the economy? How prosperity abroad affects our exports? What happens when there is disequilibrium situation? When GDP is less than the equilibrium. When GDP is more than..
How did the enclosures law fuel the Industrial Revolution in Great Britain? Would you agree with Karl Marx in saying that the Industrial Revolution and its capitalistic foundations negatively affected the working classes?
Question 1: Consider the following sequential-move game between Ann and Bob.
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