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Suppose the monthly demand for automobile tires at a tire dealer is normally distributed with a mean of 300 tires and a standard deviation of 80 tires. How many tires must the stores must the store have in inventory at the beginning of each month in order to meet demand 95 percent of the time?
The expected annual net savings in operating costs will be $25,000 during the first year and $40,000 during the second year. If your interest rate is 10%, what would be the equivalent net savings per machine-hour?
It is a typical Christmas electronics shopping season, and makers of flat-panel TVs are marketing the latest available models through their own Web sites as well as via retailers such as Best Buy and Walmart. Each manufacturer offers its own unique v..
the bursting of the housing bubble and the panic of 2008 caused both businesses and households to cut back on their
Suppose you are in charge of monetary policy. Assume your goals are a full employment level of production with price stability. Assume further the economy has excess capacity with unemployment at 7.8% (the natural rate is 5.2%), but you are concerned..
Imagine a firm with the same cost structure but in each of the four market structures: Competitive, Monopolistically Competitive, Oligopoly, and a Monopoly. Using the concepts of consumer surplus and producer surplus, explain the long run outcome in ..
Classical economic theory says there is a linkage between investment and savings. Explain the source of this linkage. What is the argument that says this link is not as strong as classical economists believe? (Hint: Differentiate between the parties ..
Let’s compare the incentives generated by two different types of public programs. The Aid to Families with Dependent Children (AFDC welfare before reform) provides an income subsidy, G, at 0 hours of work, it is taxed away at a rate t when an individ..
How would you define the geographic and product markets of large healthcare organizations such as the Mayo Clinic, Cleveland Clinic, Kaiser Permanente, and Johns Hopkins?
If Social Security were considered part of the general budget then,
Based on your own experiences, extend the list of analogies between the human body and the economy as outlined in this chapter. Then, determine which variables in your list are stocks and which are flows.
Brian has the utility function U(X,Y)= X+16sqrt(Y), where X is the quantity of water consumed, and Y is the quantity of coffee consumed. Let the price of water be Px=1 and the price od coffee be Py=4. Let I represent income. (a) If I =8, what are the..
A firm currently uses 100 workers to produce 200 units of output per day. The daily wage (per worker) is $80, and the price of the firm's output is $50. The cost of other variable inputs is $600 per day. The firm’s fixed cost is 8,000. The marginal c..
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