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you are the manager of a perfectly competitive firm selling a product. Your business is making a loss because total revenue is less than total costs. What would you do--shut down or continue to operate? Use hypothetical numbers to explain. Information you need to provide include--state the product you are selling, the price of the product, the quantity of the product you produce, fixed costs, total cost, figure out total revenue, total and average variable costs. Then go ahead and make your decision. Explain carefully why it makes better sense to shut down rather than continue to operate or to continue to operate rather than shut down, as the case may be. How do fixed costs play a role in your analysis? What is the difference between shutting down and going out of business?
One government strategy to provide for economic stability and encourage economic growth is to provide tax reductions or tax incentives for individuals and businesses. An alternative approach is to increase government spending to accomplish these g..
Sam currently earns $30,000 per year. the governments is considering a policy that would increase sam's income by 12%, but raise all prices by 8%. what is sam's compensating variation for the proposed policy? can you compute it without knowing his..
Deep global recession might trigger changes in expending from imported items to domestically manufactured items. What are at least two policies that governments might implement to increase expending on domestic items.
The demand for illegal drugs is inelastic. Much of the expenditure on illegal drugs comes from crime. Assuming these statements to be correct, How will a successful campaign that decreases the supply of drugs influence the price
Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country. If policymakers do nothing, what will happen to aggregate demand? Explain what the Fed should do if it wants to stabilize aggregate demand. I..
Describe why some firms might suffer diseconomies of scale. Do you know any examples? Could GM be an example of diseconomies of scale?
The CEO of Always Ready Round Tire has decided to open a battery division. He thinks that batteries would sell well with tires at their outlets and that Always Round's quality reputation will be transferred to the batteries.
Discuss the function performed by a financial intermediary in linking surplus and deficit units in the financial market. What will happen in the financial market if the financial intermediary does not exist
Choose any firm and think about its buying and selling activities -everyone buys and sells, or at least "procures" and "supplies", or otherwise participates in exchange transactions.
Suppose the central bank conducts an unusually large open market purchase of bonds held by banks of $1,400B due to a sharp contraction in the economy. Assume the ratios you calculated in part (a) remain unchanged, what do you predict will be the e..
Analyze the makeup and policies of the European Union and determine if all countries have benefited from their membership (larger vs. smaller countries)
A company obtained $500000 for a necessary technology from a venture capitalist who charges them 24% compounded monthly. the agreement calls for no payment until the end of the first month of the fourth year, with equal monthly payments thereafter..
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