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How do the concepts of accounting profit and economic profit differ? Why is economic profit smaller than accounting profit? What are the three basic sources of economic profit? Classify each of the following according to those sources:
a. A firm's profit from developing and patenting a new medication that greatly reduces cholesterol and thus diminishes the likelihood of heart disease and stroke.
b. A restaurant's profit that results from construction of a new highway past its door.
c. The profit received by a firm benefiting from an unanticipated change in consumer tastes.
EconS 323 Problem Set 7'4, Questions on Hedonic Wage Theory and Employee Benefits, Risk and earnings, Teacher Quality and Compensating Wage Differentials
Describe the revenue, costs, and profit that Starbucks expected when it entered this market.
What does the market for sugary sodas look like? Provide a supply-demand graph with realistic prices.
Does it make sense to hold sleep, work, and leisure fixed while changing study? Why or why not? Explain why this model violates the assumption of no perfect collinearity.
Some commentators have argued that the failure of the “Super committee” is good thing for the economy? Do you agree?
Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:
Perform a White test for heteroskedasticity using auxiliary regression
Describe the effect of each of the following events on the market for labor in the computer manufacturing industry. Use graphs.
Find out if, for the good marked with ALL CAP lettering, if there is the increase or decrease in demand.
The demand for housing is often described as being highly cyclical and very sensitive to housing prices and interest rates. Given these characteristics describe the effect of each of the following terms of whether it would increase or decrease the..
Current economic theory and their application or lack of application to contemporary economic problems
Questions: : Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month? Explain your choice.
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