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Suppose the price of capital falls relative to the wage rate and, as a result, the demand for labor increases. Are these inputs gross substitutes, or are they gross complements? What can you infer about the relative strengths of the output and substitution effects?
Chris’s Outdoor Furniture, Inc., has net cash flows from operating activities for the last year of $390 million. The income statement shows that net income is $365 million and depreciation expense is $49 million. Calculate the end-of-year balance for..
Find a symmetric Nash equilibrium to this game. That is, what number is a best response to everyone else submitting the same number? Show that choosing the number 5 is a dominated strategy. What are all of the dominated strategies?
Continue assuming that Supply is given by the equation P = 2Q and Demand is given by P = 6-Q.how much total tax revenue is raised.
Determine if it would make more sense to open the new business you describe or to purchase the existing business you selected. Explain your reasoning.
Read the article "Abenomics is doing better than you think" and answer the following questions. Define the term Abenomics. What are its main components? What were the main problems of the Japanese economy before Abe took power (both long run problem..
Since Herbert Mohring regards the cost of widget capital as the fixed cost effectively, what can you conclude about the relationship between economic profits, quasirents and the cost of capital?
Explain if an organisation that forecast future sales and develops a budget on the basis of these forecasts conducting marketing planning?
Explain why a bundle of goods cannot be optimal (i.e., why some other bundle must be a better choice) if the marginal rate of substitution (MRS) at this point is not equal to the ratio of the goods’ prices. A consumer has a current income of $60, whi..
Elucidate the underlying experiment of interest when we want to examine the effects of cigarette smoking on workdays lost.
In year 1 and year 2, two products are produced in a given economy, bicycles and computers. Suppose there are no intermediate goods. In year 1, 500 bicycles are produced and sold at $500 each, and in year 2420 bicycles are sold at $600 each. Calculat..
Two identical countries, A and B, can be described by the IS–LM model in the short run. The governments of both countries cut taxes by the same amount. The Central Bank of A follows a policy of holding a constant money supply. The Central Bank of B f..
Humphrey and Lauren are splitting 10 gallons of soda and six pounds of popcorn. Let’s represent Humphrey’s preference with the utility function UH = 3SH + PH and Lauren’s preferences with UL = 2SL + 4PL, where SH and SL indicate their soda consumptio..
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