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A. Suppose that Shan On has received a contract to maintain an additional 1,000 elevators. Do you expect that Shan On will need to double service personnel? Why or why not?
b. Does the example in (a) illustrate economies of scale or scope
c. Escalators and elevators use quite different technology and parts. But many clients operate both escalators and elevators. Are there any economies of scope for a contractor to maintain both escalators and elevators?
In year 1 the price level is constant and the nominal rate of interest is 6 percent. But in year 2 the inflation rate is 3 percent. If the real rate of interest is to remain at the same level in year 2 as it was in year 1, then in year 2 the nominal ..
What are switching costs and what do they imply for pricing? Discuss three examples from the financial services industry showing how a marketer can take advantage of switching costs.
Koichiro and Sylvia are starting a new high-volume Sushi restaurant, called Robo Sushi in Davis. While Koichiro plans to manage the business himself, he needs to employ some combination of workers and \sushi-bots" (sushi-making robots) to produce the..
An oil and gas company is considering whether to begin drilling a new oil field. The company will need to pay $5 million as an initial investment in order to extract the oil. The company will operate the field for a total of 5 years, during which its..
Why, in a model with no production but two periods does an increase in current taxes (without a concurrent change in government spending) not a?ect consumption? How would the model likely change in terms of consumption and interest rates?
Assume the current market price of candles is such that there is a surplus.
A couple wants to save for their daughter’s college expense. The daughter will enter college 10 years from now and she will need $45,000, $46,000, $47,000 and $48,000 in actual dollars for 4 school years. What is the equal amount, in actual dollars, ..
A firm is hiring labor in a perfectly competitive market. The relationship between labor and output is given below. Assume labor is only available in whole quantities (ie L = 2.5 not possible). The current market wage is $100
It's a specialized market, so we'll just have to assume we have enough buyers and sellers to have our demand and supply curves be straight, smooth lines. The following information applies to the market before any tax is applied: Calculate the per-uni..
Suppose that money demand is given by Md = $Y(0.25 - i) as long as interest rates are positive. The questions below then refer to situations where the interest rate is zero. What is the demand for money when interest rates are zero and $Y = 80? Once ..
Let the random variable X follow a normal distribution with U(mu) = 50 and S2 = 64. Find the probability that X is less than 55. The probability is 0.2 that X is greater than what number?
Two firms A and B face the following costs to reduce their level of pollution by the amount q: cA(q) = 2q^2 cB (q) = q^2 One unit of pollution generates a marginal damage of $2 to society. With no public intervention, what level of pollution reductio..
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