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A competitive firm's short run total cost function is given by
(a) Calculate the profit maximizing output and the resulting profit when price is $30.
(b) Calculate the profit maximizing output and the resulting profit when price is $80.
Suppose there are two inputs in the production function labor and capital and that this firm has a strange technology: the two inputs are perfect substitutes. The existing technology permits one machine to do the work of three people. The firm wants ..
What lump sum of money (P) must be deposited into a bank account at the present time so that $500/month (A) can be withdrawn for five years (N), with the first withdrawal scheduled 6 years from today at a nominal interest rate (r) of 9% per year? [Hi..
Earlier this year, Greek citizens, fearing currency changes or capital controls, took billions of euros out of their bank accounts. Some of it they sent to banks in other countries, and some of it they even hid in flower pots, freezers, and yes, unde..
Two processes can be used for producing a polymer that reduces friction loss in engines. Process T will have a ?rst cost of $750,000, an operating cost of $60,000 per year, and a salvage value of $80,000 after its 2-year life.
Economists estimate that the supply function for the widget market is given by the following expression: q = 0.2 · π − 40 a. Calculate the demand and price at the market equilibrium if the demand is as defined in Problem 2.2. b. For this equilibrium,..
In January, the interest rate is 5 percent and firms borrow $50 billion per month for investment projects. In February, the Federal government doubles its monthly borrowing from $25 billion to $50 billion. That drives the interest rate up to 7 percen..
Due to the increased globalization of financial markets, we can expect all of the following, except:
A December 2007 issue of The Economist contained the following quote in an article about Germany: "The government has just chopped the payroll tax that finances unemployment insurance, which should encourage employment." Comment on this statement,..
The reduction in aggregate demand caused by deflation:
The distinction between a change in demand and a change in quantity demanded is best made by saying that:
The practices associated with project success are documented in many books, discussed at conferences, and taught in many courses. If the elements of project success are known and the consequences of failure are so undesirable, why don't more gover..
Suppose that production of very cool cars in Denmark (a small open economy) increases exports in Denmark. How does this event affect the Danish NX curve, the Danish real exchange rate, the Danish nominal exchange rate (the Danish kroner to be more pr..
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