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1. It has been said that if government wishes to tax certain goods, it should tax goods that have inelastic rather than elastic demand. What is the rationale for this? Give examples and elaborate your arguments.
2. How does having a menu that is uniform around the country provide McDonald’s with economies of scale? Why is menu planning made more complex by expanding into other countries?
3. Define “market structure.” What factors are considered in determining the market structure of a particular industry?
4. The Big Mac Price Index computed by the Economist has consistently found the U.S. dollar to be undervalued against some currencies and overvalued against others, which seems to call for a rejection of the purchasing power parity theory. Explain why the index may not be a valid test of the theory.
How does the quality of the physician's documentation in the medical record ensure quality as opposed to fraud and abuse in coding? Provide an example.
If demand for medical care is perfectly inelastic, hospitals and physicians are able to charge any price (up to some maximum) without losing any patients. Explain your answer using the model in Dranove & Satterthwaite (1992, 2000).
What are your opportunity costs of water and dates? What are Mohammed’s opportunity costs of water and dates?Who has an absolute advantage in dates and water production and who has a comparative advantage in dates and water production? How many dates..
Chief Executive Officer (CEO) Pay There are several possible methods for determining the pay of CEOs in large corporations.
You are evaluating two different silicon wafer milling machines. The Techron I costs $222,000, has a three-year life, and has pretax operating costs of $57,000 per year. For both milling machines, use straight-line depreciation to zero over the proje..
An investor is considering the construction of a new marina on the Detroit river at a cost of $68m. M&O costs will average $80,000 per year for the first five years, and rise to $100,000 per year thereafter. A major overhaul costing $12m will be requ..
What would happen in this market? If consumers’ expectations were such that they were concerned about the economy and jobs, what would you think would happen in this market?
Investigate Starbucks Coffee Company commitment to and performance in sustainable business and discuss Starbucks Coffee Company in terms of sustainability, addressing the following:
To introduce GNP and GDP, and other concepts of the National Income accounts, and to show how they help us understand the growth of the U.S. economy over the past century.
He plans to marry at about the end of year 6 and will skip the investment contribution that year. How far below or above his $300,000 goal will he be?
Suppose an individual has the following utility function defined over wealth: U = U(√wealth). The individual has an initial wealth level of $20,000. What is the expected loss? What is the maximum amount this individual is willing to pay for insurance..
What do we call financial institutions through which savers can indirectly provide funds to borrowers?
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