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Overhead at the water cooler: "The demand and cost estimates that were provided at the meeting are very useful [Q= 90 - 6.5P and TC= 150 + 3.5Q]. Unfortunately, what we didn't realize at the time was that our fixed costs were underestimated by at least 30 percent. This means that we'll have to adjust our price upward by at least 30 percent to cover the added fixed cost. In any case, there is no way in the world that we can survive by charging less than $9 for our product."
a. Comment on this statement. Do you agree with the speaker? Explain. Illustrate your answer with the use of a graph indicating the firm's short-run cost structure.
b. What price do you think this firm should charge if it wants to maximize its short-run profit?
Briefly explain the meaning of f test why do you think this test is considered to be more important in multiple regression analysis than it is in simple regression analysis.
If the economy is competitive so that factors of production are paid the value of their marginal products, illustrate what is the share of total income that will go to land.
Depends on the evidence in this article and what you know about the economy in the United States, decide which of these statements is most likely to be true.
What can be accomplished about the impact of transportation costs on the price of the traded product in each trading nation.
The country of Meditor uses the merit as its currency. What were its consumption and government expenditures on goods and services.
What happens to each of these values if the central bank changes the reserve requirement ratio to 3%.
Laptops have also become easier and cheaper to produce as new technology has come online. Despite the shift of demand prices have fallen
Elucidate briefly in what way the HOV, or factor content theorem, extends the standard HO model.
Which fiscal balance is likely to be influenced and Explain how by treating human capital investments the same as physical capital investments.
Federal Reserve lowers the required reserve ratio from 0.10 to 0.05. How does this affect the simple money multiplier.
Suppose the distribution of innate ability is distributed symmetrically throughout a population but which the wage distribution is positively skewed.
Suppose the money supply is currently $500 billion and the Fed wishes to increase it by $100 billion. Given a required reserve ratio of 0.25, what should it do?
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