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Suppose a firm uses 2 inputs to produce one output. Can you derive an optimality condition for conditional factor demand for the first input if the second factor is fixed in the short run? How does it look like?
Explain all your answers below clearly, including brief definitions of each term.
Elucidate factors would you consider before investing in the emerging stock market of a developing country.
Time Magazine and Newsweek are two competing news magazines. Suppose that each company charges the same $5.00 price for their magazines. What is the Nash equilibrium for this sequential game?
Suppose that a firm is a perfectly competitive industry has the following total cost schedule: Compute a marginal cost and average cost schedule for this firm.
If increased government spending and tax cuts were equally effective in stimulating aggregate demand, which fiscal tool would you select? Why?
Answer the next three questions on the basis of the following production possibilies data for Francia and Galacia. All data are in tons.
Suppose that workers and firms could always predict next year\'s price level with perfect accuracy.
A profit-maximizing monopolist never produces in the inelastic part of a linear demand curve. The short-run supply curve of a competitive firm is its MC curve.
The following quotations are from an article in the Financial Times on November 9, 2007:
Suppose the two rival office supply companies Office Depot and Staples both adopt price matching policies. If consumers can find lower advertised prices on any items they sell, then Office Depot and Staples guarantee.
Assume initially that the exchange rate is $2 per pound, and a particular car sells for $20,000 in New York and 10,000 pounds in London. Create new prices and a new exchange rate that will yield PPP.
Suppose that the town of Grayrock had a population of 10,000 in 1998 and a population of 12, 000 in 2003.
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