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It is your first day on the job at the Itty Bitty Machine (IBM) company and your new boss wants your advice. The company has invested $10 million in its new computer software. The company has just received an offer from a Latin American company to purchase 100,000 copies of the software at a price of $50 each. While IBM has the capacity to produce the software, it will cost the firm one million dollars to translate the software into Spanish. In the absence of other information, should IBM accept or reject the offer? Please answer this question using the tools of analysis developed in this course.
Application of Nash Equilibrium and Game Theory with examples
Suppose that the domestic demand and supply for hats in a small open economy are given by-Where Q denotes quantity and P denotes price.
Compute the total revenue and total economic profit at each level of output. Compute the pizza shop's marginal costs and marginal revenue level of output. What is the profit maximizing rate of output for pizza shop?
Briefly accounting describe two limitations of national income. On the basis of these data calculate GDP, GNP, NDP, NI, PI, and disposable personal income.
Lawn mowing services are supplied by a host of individuals in the suburb of Westbrook. Demand and supply conditions in the perfectly competitive domestic for lawn mowing services are:
Using the theory of oligopoly and the concept of prisoners dilemma, explain why the cigarette companies did not cut on advertising on their own to increase their profits before the law went into effect?
All firms in a Cournot monopolistically competitive industry have the same cost function C (q)= 25 + 10q. Compute the equilibrium price, total output, firm output and number of firms in the industry.
Show the new utility maximizing bundle of gasoline and all other goods. What is the slope of the new budget line? What is the consumer's new MRS of all other goods for gasoline?
Two executives were arrested by authorities for embezzling money for their firm. Short of confusion the only had enough evidence to put them away for 10 Years.
The investment demand curve is a useful tool to summarize an important and complex relationship in the economy. The determinants that may cause this Investment Demand Curve for the U.S. economy to shift are acquisition
An open economy has the following pattern of income and domestic expenditure: For each of the three years, evaluate the balance of trade facing the economy.
Mention the four assumptions for the Monopolistic competition model.
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