Explain the statement export its way out of trouble

Assignment Help Microeconomics
Reference no: EM13199685

An article in Business Week warned of the dangers of deflation as the collapse of numerous Asian economies was creating worries that Asia might try to “ export its way out of trouble” by oversupplying everything from automobiles to semiconductors. Evidence that deflation had become a genuine concern for managers was provided by a statement in the article by John Smith, chairman and CEO of General Motors Corporation: “Fundamentally, something has changed in the economy. In today’s age, you cannot get price increases. ” The article offers the following advice to managers: “Productivity growth lets companies boost profits even as prices fall.”

Using short-run production and cost theory, comment on this advice.

Reference no: EM13199685

Questions Cloud

In what way the company realize a profit : If a company manufactures records and its cost equation for a week is C = 300 + 1.5x and its revenue equation is R = 2x, where x is the number of records sold in a week, how many records must be sold for the company to realize a profit?
How does a firm then maximize the total revenue : Describe the relationship of the demand curve and total revenue curve, indicating which of the four types of market structures market power like this would occur (i.e., perfect competition, monopolistic competition, oligopoly, monopoly).
What would the benefits of each action be : As a policy maker concerned with correcting the effects of gases and particulates emitted by and local power plant, answer the following questions: What two policies could you use to reduce the total amount of emissions Why do you think they each w..
Risk tolerance and factors in setting risk tolerance : Define risk tolerance and factors in setting risk tolerance and define limitations in risk tolerance and potential outcomes.
Explain the statement export its way out of trouble : An article in Business Week warned of the dangers of deflation as the collapse of numerous Asian economies was creating worries that Asia might try to “ export its way out of trouble”.
What would a export in adam smiths world : Country B has 35000 units of labor and takes 7 units of labor to produce one unit of manufactures and 5 units to produce one unit of food. What is the price of manufactures in terms of food at which A and B would respectively supply manufactures.
Weighted average cost of capital for ctrl : Calculate the weighted average cost of capital for CTRL using the market valuation approach.
State the two-sample test for equality of proportions : Find the test statistic and do the two-sample test for equality of proportions. Is the decision close?
What will happen if ibm revised its outlook for the yen : Using cash flow analysis determine the best currency option in which IBM should invest. Be sure to show your complete calculations of the annual return on each investment at the end of the three-year term.

Reviews

Write a Review

Microeconomics Questions & Answers

  Derive the foc and soc conditions of profit maximization

Derive the FOC and SOC conditions of profit maximization for this firm. Show that SOC is satisfied (impose necessary conditions). Which plant will have a greater increase in output? Please explain why.

  Define the distribution and transportation issues

Completion of import documents needed for entry into the U.S. to include the tariff classification number and impacted duty rates or fees Potential dumping issues (i.e. predatory pricing with knockoff products: when manufacturers export a product ..

  Capital-marginal productivity of labor

Determine the rate of can rent capital and marginal productivity of labor at its new targeed level of output. To minimize the cost, the car company should hire capital and labor until the marginal rate of subsitution reaches what portion?

  Describe marginal cost

On average college graduates earn significantly more income than those with less education and the disparity tends to widen into middle age. marginal external cost equals marginal private cost minus marginal social cost.

  This firm''s average costs

A firm that emerges as the only seller in an industry with economies of scale is a(n): The profit maximizing rule MR = MC applies to: Suppose that the total cost curve for a firm is given by the equation TC = a + bQ, where 'a' and 'b' are positive nu..

  Use of the understanding of demand

If total consumer expenditure remains the same after a new tax is imposed on cigarettes then spending on cigarettes will decrease and spending on other goods will increase.

  What were the provisions of the glass-steagall act

What is adverse selection? How does it harm the economic process and what is moral hazard? What are its consequences

  What level of biomass generates this amount of harvest

What is the maximum amount of harvest that can be sustainably achieved in this system? What level of biomass generates this amount of harvest?

  Impact of incentives on production plans

Suppose you manage a United States based firm that makes shoe laces that you sell in a highly competitive market your shoe laces are considered a standardized commodity through your consumers

  Influence on the market supply of labour

Use a graphical illustration to describe briefly what the influence on the market supply of labour

  Determine price in the long run equilibrium

For a typical competitive firm, the price in the long run equilibrium will tend to: be greater than average cost, be equal to average cost, be less than average cost, intermediate

  Find highest profit or lowest loss availability to this firm

What is the highest profit or lowest loss availability to this firm? c. Should this firm operate or shut down in the short run? Why? d. What is the relationship between marginal revenue and marginal cost as the firm increases output?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd