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In 1999 Mercedes-Benz USA adopted a new pricing policy, which it called NFP (negotiation-free process), that sought to eliminate price negotiations between customers and new-car dealers. An article in The New York Times (August 29, 1999) reported that a New Jersey Mercedes dealer who had his franchise revoked is suing Mercedes, claiming that he was fired for refusing to go along with Mercedes' no-haggling pricing policy. The New Jersey dealer said he thought the NFP policy was illegal Why might Mercedes' NFP policy be illegal? Can you offer another reason why the New Jersey dealer might not have wished to follow a no-haggling policy?
A firm with two factories, one in Michigan and one in Texas, has decided that it should produce a total of 500 units to maximize profit. The firm is currently producing 200 units i
Interest rate determination The real interest rate r will be equal to the equilibrium real interest rate In the classical model we define equil
The primary functions of economists are to teach, contribute research and empirical findings and formulate policies. Most of the professional economists are associated with academi
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What is the definition of opportunity cost?
What are the crisis affect the economies This crisis would affect the UK in 3 major ways. First the UK would be unable to sell its exports to these economies if they are hea
This problem substitutes financial health with housing in a 2 period consumption savings model. The representative consumer has the utility function u(c1, c2) = lnc1 + lnc2 with ea
In January of 1997, the U.S. Consumer Price Index (CPI) stood at 159.1. By January of 2008, the level had risen to 211.1. What was the average annual rate of inflation over this ti
ACCOUNTING SYSTEM-EXAMPLE I Consider a very simple economy. It consists of a. A number of households. b. A single productive organization, a 'firm' - say the Jam Corpora
1. Consider the following game: a) Does either player have a dominant strategy? b) Does either player have a (pure) prudent strategy? c) Does the game have a saddlepo
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