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A consumer would gain more utility from purchasing a video game than from purchasing a TV, even though both products they both have the same price of $400. Assuming the consumer is rational, which will they choose to purchase? Why? Hint: why they choose one over the other might have something to do with utility and opportunity cost.
Morgan company’s marginal cost curve is: MC = 4+3Q Where MC is marginal cost and Q is the number of units of its product. The price of a unit of its product is $3. A consultant hired by the company argues based on the evidence, the firm would make mo..
Suppose that you have a $15,000 balance on a car loan. The balance accrues interest annually at a rate of 7% of the total unpaid balance at the end of the year. So the balance in one year depends on the current balance, the interest rate, and the pay..
With gasoline prices increasing rapidly in recent years, consumers have moved to high miles-per-gallon (mpg) vehicles, in particular hybrid autos that rely on a battery as well as a gasoline engine for even greater mpg. Generate a cost function for e..
In the simple monetary policy rule, a large m means that the central bank is aggressive fighting inflation. If the monetary policy parameter m changes, there is a movement along the AS curve. When the Federal Reserve lowers the nominal interest rate ..
You have $100 to spend on food and clothing. The price of food is $5 and the price of clothing is $10. A. Graph your budget constraint. B. Suppose that the government subsidizes clothing such that each unit of clothing is half - price, up to the firs..
Why do manufactures like Procter and gamble spend millions of dollars annually creating and maintaining their brands? Why won’t they just manufacture their products and sell them under store brand labels?
Gomez runs a small pottery firm. He hires one helper at $15,000 per year, pays annual rent of $6,500 for his shop, and spends $23,000 per year on materials. Calculate the accounting profit and the economic profit for Gomez’s pottery firm.
A number of Latin American nations export coffee and import other goods. A long-term drought now reduces coffee production in the countries of this region. Assume that they remain exporters of coffee. Explain why the long-term drought in the region m..
Suppose the owner bears a monitoring cost of m, which is subtracted from income, so that the owners utility is U (x^beta, y^beta-m). mLet the monitoring cost person be a function m(n) of the number n of team members, with m increasing as n increase. ..
Why manufacturer guarantees the computer for one year only. The cost of the extended warranty is $150. Analyze this proposition using the concepts you learned in the module on risk analysis.
Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Pursue inward-oriented policies. Increase taxes on income from savings.
An oil company is considering a routine core analysis to be done from an outside lab. The outside lab charges 20$ per core plus $1 per core for shipping and handling. Discuss why the core analysis should be done outside. What is the correct perspecti..
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