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An elderly physician has built up his own practice into a quite valuable business. Now that he is thinking of retiring, he wants to take on a partner to learn the business and eventually buy the practice in three years. Her compensation will be a salary plus 25% of the profits if they are below the historical average and 50% for any increase above the historical average. The eventual purchase price for the practice will be 5 times the average profits over the three years. Discuss the plusses and minuses of this contract with respect to efficiency aspects and transfer of the business to the new partner. Do you think the incentives of the buyer and seller aligned?
Discuss the following excerpt from a recent story in the Wall Street Journal. In your discussion demonstrate that you can use the concepts of: "price discrimination and "barriers to entry" to explain:
Evaluate the Keynesian economists, besides John Maynard Keynes. Determine which economist you feel made the most significant contribution to economic theory. Justify your selection.
In an article about the financial issues of USA Today, a major magazine reported that the newspaper was losing about $20 million a year. A financial analyst said that the paper should raise its price from 50 cents to 75 cents,
This means “to let the decision stand” and is used by courts to make consistent judgments.
A manager of a day-care center in Christchurch, New Zealand has a clearly stated policy that parents are supposed to pick up their children by 4pm (16:00). But often parents are late. Each week, there is an average of eight late pickups. To combat ta..
Provide optimal wage-bonus package, compute this employees' effort, expected payoff and employer's profit. Draw a game tree for employer-employee game in parts a-c.
illustrate what are the likely consequences for future economic growth in China and India
What causes movement along AD curve? What causes a shift in the AD curve? What are the factors that affect consumer spending ( C)? What are the factors that affect changes in Investment spending (I)?
If mortgage rates rise from 5% to 10% but the expected rate of increase in housing prices rises from 2% to 9% , are people more or less to buy houses. IRs was lower in the mid-1980s than in the late 1970s, yet many economists have commented that real..
Suppose that the labor market is competitive and there are a total of 1,000 black workers and 1,000 white workers (who each supply their labor in elastically). Both black and white workers are equally productive, having constant individual dollar pro..
The minimum wage in California is currently $9.00 per hour. Suppose that in the market for unskilled labor, there is a surplus of labor at that price because the $9.00/hour is higher than the equilibrium wage. using a supply and demand graph, illustr..
Assume that the country is in a period of high unemployment, interest rates are at almost zero, inflation is about 2% per year, and GDP growth is less than 2% per year. Suggest how fiscal and monetary policy can move those numbers to an acceptable le..
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