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Which of the following is the correct name for the idea that certain firms prefer government regulation because regulation shields them from the pressures of competition and, in effect, guarantees them a regulated profit. a. The public interest theory of regulation. b. The structuralists’ theory of monopoly. c. The legal cartel theory of regulation. d. The public regulation theory of natural monopoly.
Two Cigar makers are trying to determine whether or not to advertize their products on TV, and the effect on their profits. The Govt. is likely to ban Advt. related to Smoking on TV, and would charge a Penalty Surcharge Tax of $30m for any smoking ad..
When all of the available factors of production are being efficiently used,
Illustrate what happens if the consumer faces a borrowing constraint that prevents her from borrowing.
A coffee retailer (Joe’s) developed the following daily demand curve for coffee for Elizabethtown, KY. Q = 500 - 300(P) + 200(Pc) + 0.01(A) Where P is the price of Joe’s coffee, Pc is the price of Starbuck’s, and is income in Elizabethtown. Currently..
According to the Wall Street Journal (Nov. 1, 1995), net income for World Airways in the third quarter of 1995 was $3.359 million or 33 cents per share. This is a significant rebound from its 1994 third quarter performance in which World Airways' net..
Explain how you would calculate the price elasticity of demand of gasoline? In general terms, explain how consumer and producer surplus will change as a result of this price increase?
Consider a finite set of prizes X and probabilities P on them. Suppose that an expected utility maximizer's preferences > on P have an expected utility show with utility function on prizes u : X->R.
The Australian dollar has appreciated strongly over the past decade, leading to increased concerns over the impacts of the high exchange rate on trade-exposed sectors of the economy".
Robert’s New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. What are the profit-maximizing price and output levels? Explain them and calculate algebraic..
For each of the situations below use supply elasticity to explain the how the equilibrium price and quantity change. (a) The demand for collectable baseball cards from the 1950s increases. (b) The demand for silver decreases. (c) In the long run, the..
Calculate the ICER for the new treatment, assuming that the new treatment would replace the old one. In what quadrant is the ICER located in Figure 3-4? Is cost effectiveness analysis relevant? How does the answer change if the cost of the new treatm..
Describe the relationship between costs and values in a society affected by externalities. Discuss the options that people and governments have to take account for their actions in these markets. Include comments regarding equilibrium and welfare dyn..
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