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1. Why does rent control result in a shortage of rental units.
2. How does price elasticity of demand affect how much of a tax is passed on to the consumer and how much is absorbed by the seller. Show the effect with graphs.
3. Why can monopolistic firms make economic profit in the short run bot not in the long run. Explain and show graphically.
4. Your brother-in-law wants to borrow $1000 from you but he has a fit when you tell him he will have to pay you the same interest on the loan that the bank gives you. Are you justified? Why or Why not?
5. During the 1930s Jewish fighters dominated boxing. From the around 1975 until the present, blacks have dominated basketball. Explain the causes underlying these two situations.
Employing the new factory would ultimately reduce average total cost and the present value of the gain from employing the new factory must be less or equal to $50 million.
Gentleman Gym just paid its annual dividend of $3 per share, and it is hugely expected that the dividend will raise by five percent per year indefinitely.
Provide an example of an airline or aviation firm trying to take advantage of economies of scale. Do you think they are/were successful? In what way?
Consider a firm which employs capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. As well suppose that total labor costs to the firm are $45,000 annually.
Explain the effects of the $26 a week increase in the minimum wage on the workers' surplus and the firms' surplus. Has the labour market become more efficient or less efficient? Explain and show the welfare measurement analysis in the graph.
For each of following changes, show/explain the effect on DEMAND CURVE and state what will take place to market equilibrium price and quantity (in the short run).
Assume that the demand and supply functions for good X are as follows: What is the equilibrium price and equilibrium quantity?
Use method of Lagrange multipliers to find the cost function c(r,w,y). Find out the average and marginal cost. Find out the interpretation of the Lagrange multiplier in part (a)? What is the importance of term (a+b) being less than, equal to, or grea..
Describe a market situation in which the operating company faces economic difficulties and need to cut costs. What cost cutting strategies may the operating company employ to remain profitable?
Compute the formula for Bob's indierence curves by setting and compute Bob's MRS as a function of C and P
The United States cigarette industry has negotiated with Congress and government agencies to settle liability claims against it. Under the proposed settlement, cigarette firms will make fixed yearly payments to government based on their historic mark..
How foreign direct investment influences the wages
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