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In evaluating projects, LeadTech’s engineers use a rate of 15%. One year ago a robotic-transfer machine was installed at a cost of $38,000. At the time, a 10-year life was estimated, but the machine has had a downtime rate of 28%, which is unacceptably high. A $12,000 upgrade should ?x the problem, or else a labor-intensive process costing $3,500 in direct labor per year can be substituted. The plant estimates indirect plant expenses at 60% of direct labor, and it allocates front office overhead at 40% of plant expenses (direct and indirect). The robot has a value in other uses of $15,000. What is the difference between the EACs for upgrading and switching to the labor-intensive process?
When medical care is reimbursed through employer provided insurance whose welfare is ultimately affected when cost of medical care rises: the owners of the firm that pays the premiums, the government whose revenues are reduced because insurance benef..
How do government programs that provide benefits for the poor (such as food stamps) change the incentives of people to be classified as "poor"?
When Mik has an absolute advantage in the production of two goods over Tommy, Mik
Illustrate what is your opinion of the restaurateur's decisions. Would you recommend that she accept the $66,000 offer.
Suppose two firms engage in Cournot (quantity) com- petition in a market described by the following demand curve: Q(p) = 40 − 2p. (1) Assume that the firms each have marginal costs equal to zero. Let q1 and q2 be the quantities produced by each firm ..
Explain the design of a public policy that would subsidize the private performance of the R&D (to ensure that the research is done by the private sector) yet would minimize the public funds used.
In regard to developing countries, if American foreign policy makers have to choose between supporting an election that brings to power an anti-American government or supporting a dictator who is pro-American, which should they choose, and why? ? How..
Abenomics seems to me like a straightforward and modern plan of economic revelation through monetary easing and some attempt at structural reform. While it's still early, it looks like many of the predicted effects of this approach have begun to mate..
An MBA student has proposed the following demand equation for good Y. What fraction of the total variation in the quantity demanded of good Y remains unexplained? What can the student do to increase the explanatory power of his demand equation? What ..
Distinguish between comparative advantage and competitive advantage (may take some research on your part). Which is used by economists as a justification for international trade? Why?
Which of the following are sources of lags in monetary policy?
Consider a product that has a cost function c(y) = 10y. What is a monopolist’s optimal production plan and price? What would the equilibrium price and output be under perfect competition? what is the deadweight loss from the monopoly? (know how to so..
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