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Blue Skies Aviation is a manufacturer of small single-engine airplanes. The company is relatively small and prides itself on being the only manufacturer of customized airplanes. That companies high standard of quality is attributed to its refusal to purchase engines from outside vendors, and it preserves its competitive advantage by refusing to sell engines to competitors. To achieve maximum efficiency, the company has organized it self into two divisions: a division that manufactures engines and a division that manufactures airplane bodies and assembles airplanes. Demand for Blue Skies customized planes is given by P = 610,000 - 2,000Q. The cost of producing engines is Ce(Q) = 4,000Q3e and the cost of assembling planes is Ca(Q) = 10,000Q. What problems would occur if the manager of each division were given incentives to maximize each division's profits separately? What price should the owners of blue skies set for engines in order to avoid this problem and maximize overall profits?
If a tax were to be imposed on one of these items, for which item would the tax be the most efficient.
President Bill Clinton assigned his wife the task of developing a national health insurance plan to increase the availability of medical care for the poor. Explain how would one determine the opportunity cost of the proposal.
If you are near graduation and plan to start your new job in 3 weeks, how does the Bureau of labor statistics classify you? Unemployed, employed or notin labor force.
A consumer must pay $10 per visit to an amusement park for the first five visits but only $5 per visit beyond five visits. What does the budget.
Describe the equilibrium price and quantity, producer surplus and consumer surplus.
Presently, boats rent for $500 per day also workers cost $100 per day. How many workers do you need to produce 200 tons of shrimp?
Suppose the firms compete in quantities. If firm 1 deviates from collusion in one period, what is the profit of firm 1 in that period in subsequent periods.
Illustrate the way in which market forces shape the organizational responses using a range of examples.
On one hand, the WTO's role in international trade is becoming more significant. On the other hand, its verdict on the Brazil's Embraer versus Canada's Bombardier case did not seem to solve the problem.
Assume also that the price of cigarettes, the income of consumers, and the price of alcohol.
decides not to play by the rules of the game. Then illustrate what could the final equilibrium position be.
Challenge of any merger that raises the HHI by 100+ points in a market where the HHI is above 1800 before the merger.
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