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The owner of a fast-food restaurant estimates that she can produce and sell 1,000 additional hamburgers per day by renting more automated equipment at a cost of $100 per day. Alternatively, she estimates that she can produce and sell an extra 1,400 hamburgers per day by keeping the restaurant open for three more hours per day at a cost of $50 per hour. Which of these two alternative ways of increasing output should she use?
Suppose that the American imports of wine are a small part of total world wine production, draw a graph for the United States market for wine under free trade.
A Firm has total cost function given by following: What is the Total fixed cost when Q = 100? And Average fixed Cost when Q=100?
Firm operates in a perfectly competitive market in which the market price is $10 per unit. What is its profit-maximizing rate of production?
Assume the damages resulting from a particular type of pollution are uncertain. Policy makers are able to asses the average level of damages, and can choose a policy instrument that will internalize the average level of externality leading to what..
In a meeting about whether to store inventory in a company-owned warehouse or rent a warehouse, a colleague says, "We should use our own warehouse and save the cost of renting one." Do you agree or disagree
Find Livia's best affordable bundle of tea and coffee. How does the equilibrium condition differ from the condition we derived in lecture for the "typical" case? How much could the price of a cup of coffee risewithout harming her standard of livin..
A machine is purchased for $150,000. Revenue for the first year was $50,000. Over the total estimated life of 8 years, what must the annual revenue for years 2 through 8 equal to recover the investment, if costs are constant at $42,000 and a ret..
Suppose that you are a government official in charge of your country's fiscal policy. The country maintains a flexible exchange rate system. You are asked by your country's citizens to use fiscal policy alone to expand the country's..
Crew Brew produces a popular brand of beer in its mini-brewery located on a small river in Wisconsin. It uses a special formula, combined with the fresh water from the local stream, to produce a drink popular with local folks and tourists who visi..
Using supply and demand diagrams, show how each of the two developments can explain the increase in the compensating wage differential. Can information on the number of workers in the risky occupation help determine which explanation is more plaus..
Case study analysis about optimum resource allocation: - Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..
Using concepts we have discussed in class, discuss the effect of having a minimum wage. The minimum wage raises workers’ wage above the equilibrium wage.
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