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It is fairly common for an industrial cluster to break up and for production to move to locations with lower wages when the technology of the industry is no longer rapidly improving-when it is no longer essential to have the absolutely most modern machinery, when the need for highly skilled workers has declined, and when being at the cutting edge of innovation conveys only a small advantage. Explain this tendency of industrial clusters to break up in terms of the theory of external economies.
Suppose the government imposes an excise tax on tractor trailers. The black line on the following graph shows the tax wedge created by a tax of $80,000 per trailer.
Robertson Inc. wishes to set aside lump sum money to withdraw from and invest in automating parts of its business over the next 5 years. This money is expected to earn compound interest at the rate of 10% per year.
For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 2 percent. If, as a result of this price increase, the volume of all cereal sold by Big G dropped by 3 percent,
What is the average of these five amounts?
If they both choose the Casual line, they will each make profits of $1000 per week. If Bells chooses Formal while Follies chooses Casual, then Bells will make $500 and Follies will make $1500 per week. If Bells chooses Casual while Follies choos..
Will revenues increase or decrease in the short and long runs?
Plot graphically the demand and MR curves for each market, and also show GGC's combined marginal revenue curve (?MR) and its MC curve. Show graphically the quantities that should be produced and sold, and the prices that should be charged, in each..
There are 80 firms in the industry. The cost function of individual firm is T = 100 + 4q + 4q2. Demand function is Q = 1040 - 10P. Find the equilibrium price and quantity for the short-run. How many firms will exist in this industry in the long ru..
Suppose that Belgium cocoa beans can be sold in the U.S. The U.S. demand schedule for Belgium cocoa beans is as follows: Price of Belgium cocoa beans (per pound) Quantity of Belgium cocoa beans demanded (pounds)
the following regression model has been proposed to predict sales at a computer store. y = 50 - 3x1 + 20x2 + 10x3 where x1 = competitor's previous day's sales (in $1000s), x2 = population within 1 mile (in 1,000s) x3 1.) if radio advertising was u..
In addition, Mexico does much more trade relative to its GDP. Explain these differences using the gravity model.
A spike in the unemployment rate-the biggest in more than 2 decades-raised new concerns Friday that a weak labor outlook, high oil prices and continuing woes in the housing & credit markets are leading the US economy in to a painful recession.
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