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The Bandwagon Effect - This is desire to be in style, to have a commodity because almost everyone else has it, or to indulge in it. - This is major objective of marketing an
Johnson Farms owns valuable farm land that allows it to produce wheat at a lower cost than its competitors. The company reports large profits each year on its accounting statements
if tc is 200 what will be marginal cost?
Suppose that there is a credit market imperfection because of limited commitment. As in the setup with collateralized wealth, each consumer has a component of wealth which has valu
A tax imposed on a market with an inelastic demand and an elastic supply will cause
Risk Aversion and Income - Variability in potential payoffs increases risk premium. - Example: A job has a .5% probability of paying $40,000 (utility of 20) and a 5 p
Which of the following industries do you think are likely to exhibit large economies of scale? Explain why in each case. a. House building b. Electricity generation c. Market ga
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Attitude towards Risk: Let's assume the following: The utility function • has the single argument "wealth" measured in monetary units, • is strictly increasing, and
(1) The demand curve for oranges is given by the equation P = 5 – Q/200. The supply curve is given by P = Q/800. Q is measured in oranges per day and price is measured in dollars p
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