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You have opened your own word-processing service. You bought a personal computer, and paid $5,000 for it. However, due to the cost changes in the computer industry, the current price of an equivalent machine is $2,500. You could sell any used machine for $1,000. If you were not word processing, you could earn $20,000 per year at an alternative job. Assume that the interest rate is 10%. You can also hire an assistant who can do everything that you can do for $20,000 per year (you would still continue to do word processing).
One person using one computer can produce 11,000 typed pages per year, and the price per page for your service is $2.
You are considering three options: (1) expand your business by hiring an assistant. (2) leave your business the way it is (3) shut down. Based on the costs and revenues above, which should you do? Explain and show any relevant calculations.
Elucidate what happens to the price of oranges and the marginal product of orange pickers as a result of the freeze. Can you say what happens to the demand for orange pickers.
How can a compensation scheme designed to enhance worker motivation lead to this result.
Illustrate what happens to inflation is indeterminate; it could be either higher or lower than in the standard model.
The commercial banking industry in Canada is less competitive than the commercial banking industry in the united states
Using an Edge worth Box, graph the initial allocation and draw the indifference curve for each consumer that runs through the initial allocation.
If the company issues debt to finance the project what would be the value of the company. What would be the value of the levered equiy.
Illustrate that the tax be acceptable in spite of the deadweight loss. What tax revenue will be generated.
Incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.
If other people exploit the same opportunity, what will happen to the cost in Thailand as well as in Malaysia.
Explain what occurs when a new technology makes another one obsolete in terms of economic profit.
Two firms are located on the line and sell identical products. Consumers obtain K utility from consuming a product; assume that K is large enough that all consumers purchase from at least one of the firms despite the costs of transportation.
How many units will be traded at a cost of $35? At a price of $14. Which participants will be dissatisfied at these prices.
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