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What would happen to world welfare if the U.S. paid exporters a subsidy of $5 for every pair of blue jeans they sold to Canada, but Canada charged a $5 countervailing duty on every pair imported into Canada?
A bright OU student plans to win first prize in the Ohio University Scripps Innovation Challenge that began Jan 17 and ends March 13. He will invest his $10,000 winnings in a friend’s 5-year-old startup company and expects to gain 10% interest per ye..
The costs of expected inflation cause productive resources of an economy to be directed away from their efficient allocation. Explain how each of the following costs of expected inflation distrot the allocation of productive resources:
You plan to borrow $2,000 in order to take a vacation and want to repay the loan in a year. The banker offers you the following two alternatives of repaying the loan. (1) a simple interest rate of 12% with repayments in equal instalments six months a..
Suppose that two Cournot duopolists serve the Peoria-Dubuque route, and the demand curve for tickets per day is Q=200-2p (so p=100-Q/2). Total costs of running a flight on this route are 700+40q where q is the number of passengers on the flight. Each..
In the short run, if average variable cost is increasing as the quantity of output produced increases, which of the following must be true?
Toby uses apple (A) and labour (L) to produce juice (q). His production function is: Draw the Toby’s expansion path on a diagram from a). Derive an expression for the expansion path. How does it depend on the wage and the price of apple? What is Toby..
We discussed the possibility that a start up firm in San Francisco plans to 3-D print Rhinoceros horns that are indistinguishable from real horns. Assume they are able to produce these horns cheaply. Suppose the price elasticity of demand for heating..
A local supermarket lowers the price of its vanilla ice cream from $3.50 per half gallon to $3. Vanilla ice cream unit sales increase by 20 percent. The store manager notices that the unit sales of chocolate syrup increase by 10 percent. What is the ..
Determine the difference in the present worth values of the following two commodity contracts at an interest rate of 8% per year. Contract 1 has a cost of $10,000 in year 1; costs will escalate at a rate of 4% per year for 10 years. Contract 2 has th..
Explain why it is in the best interest of society to treat these types of property the same or differently.
Explain how does the price of fertilizer compare to the average total cost, the average variable cost, and the marginal cost of producing fertilizer.
Suppose it takes a total of 100 hours to produce a car (mathematically speaking, this means one hour of work “produces 0.01 cars”). If the average wage in car making is $50 per hour, and each car needs $1,000 worth of inputs other than labor, C1: Wha..
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