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Given the Cobb-Douglas production function (a) Graph the function (b) Show that the function displays diminishing marginal product. Explain what you are doing (c) Suppose the capital stock increases, what happens to the slope of the function?
Use several alternative discount rate values (1% to 10%) to investigate the sensitivity of the present value of net benefits of the dam in exercise (1) to the assumed value of the real discount rate. Determine the "breakeven" value of the discount ra..
When the price of pine sawtimber in South Carolina increased from $30 per ton to $32 per ton, the quantity one producer supplied increased from 2000 tons per month to 2100 tons per month. Calculate the price elasticity of supply for this producer. Sh..
Suppose that a small nation produces mushrooms for domestic consumption also possible export.
Suppose that Portugal and Austria consider trading stained glass and fish with each other. Portugal can gain from specialization and trade as long as it receives more than of fish for each pane of stained glass it exports to Austria. Similarly, Aus..
Suppose that the U.S. dollars-Chinese yuan exchange rate is fixed by the U.S. and Chinese governments. Assume also that labor is immobile between the United States and China due to high transportation costs. Which of the following situations is likel..
Explain why monopolistically competitive firms frequently prefer nonprice competition to price competition.
How does the Coase Theorem provide an alternative to government regulation and provision of services? How is the definition of private property critical to the Coase Theorem?
Acme Corp. plans to expand its relationship with a soft drink manufacturer to make Acme ready-to-drink coffee beverages available in Asia. The company wants to set aside $50 million now in its investment fund for the possible expansion 6 years from n..
A laboratory centrifuge costs $80,660 and has a $5530 salvage value with an 8-year recovery period. The estimated annual operating cost is $7000 per year. Use the double declining balance method with switch over to straight line to determinate the bo..
Ryan expects to deposit $1,000 now, $3,000 four years from now, and $1,500 six years from now in an account that is earning 12% per year compounded semi annually through a company-sponsored saving plan. What amount can he withdraw ten years from now?
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 ..
Suppose that in an economy, net taxes and governemnt spending are independent of income. It is determined that when government spending falls by $200 billion income falls by $800 billion. What is the MPS? What is the MPC?
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