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Listed here are several examples of bad, or at least questionable, decisions. Evaluate the decision maker's approach or logic. In which of the six decision steps might the decision maker have gone wrong? (a) Mr. and Mrs. A recently bought a house, the very first one they viewed. (b) Firm B has invested five years and $6 million in developing a new product. Even now, it is not clear whether the product can compete profitably in the market. Nonetheless, top management decides to commercialize it so that the development cost will not be wasted. (c) You are traveling on a highway with two traffic lanes in each direction. Usually traffic flows smoothly, but tonight traffic moving in your direction is backed up for half a mile. After crawling for 15 minutes, you reach the source of the tie-up: a mattress is lying on the road, blocking one lane. Like other motorists before you, you shrug and drive on. (d) The sedative thalidomide was withdrawn from drug markets in 1962 only after it was found to be the cause of over 8,000 birth defects worldwide. (An exception was the United States, where the use of thalidomide was severely restricted).
Shows the productivity for the countries Pin and Pang. Machines Bread Pin 4 or 3 Pang 3 or 8 1) If the working population of Pin and Pang are both 6 million, divide
Discretionary fiscal policy will stabilize the economy most when: A.) deficits are incurred during recessions and surpluses during inflations B.) the budget is balanced each year C
Equilibrium Income The next step is to use the aggregate demand function, AD, to determine the equilibrium level of income and output. This is done in figure . Recall that the
A change in government purchases of goods and services results in a change in real GDP equal to $200 million. Assume the absence of taxes, international trade, and changes in the a
The circular flow of income in a closed economy A closed economy exists when there is no international trade. We shall also assume that in this particular closed economy there
Read "How Did Economists Get It So Wrong" by Paul Krugman and second, the blog "History of Economics Playground", by Pedro Duarte, Tiago Mata, Clement Levallois, Yann Grd...etc., t
discus the various measures that may be taken by a firm to counteract the evil effect of a trade cycle
Illustrate about the Effective exchange rate Assume that we are interested in external competitiveness of a country, say Japan. To do this we could look at evolution of a speci
A monopoly has a total cost function of C(Q) = 8Q and faces a market demand Q = 100 ? 2p, (a) calculate the deadweight loss; (b) The firm now spent an amount equal to half of
A young chef is considering opening his own sushi bar. to do so, he would have to quite his current job, which pays him $20,000 a year , and take over a store building that he owns
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