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The COO notifies all plant managers in the company of a simplified bonus program. A plant manager's bonus will be tied to one measurement - average production cost. The lower a plant's average production cost, the higher the bonus. Is this type of bonus structure in the interest of the company? Use theoretical and graphical insights from chapter five of the textbook to explain your reasoning.
Assume an economy's real GDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its real GDP?
In each of the cases listed below determine what this consumer needs to do (in terms of purchasing X and Y) to maximizes their utility.
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Calculate total factor productivity growth (our measure of technological progress) for each country using the growth accounting framework discussed in class.
Explain how the aggregate expenditure function shifts in response to the changes in each of the following variables:
As the manager of Pelican Point Financial Group, you are unable to determine whether any given individual is a high or low volume transaction investor. Design a self-selection mechanism that permits you to identify each type of investor.
What can you say about the relationship between marginal revenue and marginal cost for output rates below the profit-maximizing (or loss-minimizing) rate? For output rates above the profit- maximizing (or loss-minimizing) rate?
Using above demanded schedule, find out the elasticity of demand for each price change. (Example: when price changes from $5 to $10, quantity demanded changes from 1000 to 800 oz., so the elasticity of demand, by using average values, is 1/3 or 0...
Using a supply and demand graph, make one shift of wither the supply or demand curve to illustrate the likely result of this action.
The Mor Tex Company assembles Garments by hand even though a textile machine exists that can assemble garments faster than a human.
Throughout this course we have discussed the 'agency problem' - i.e., when the interests of owners and managers are not properly aligned.
The kinked-demand schedule that an oligopolist believes confronts the firm is given in the table below. Compute the oligopolist's total revenue at each of the nine prices
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