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Let money income be $10 while the price of good 1 is $2 and the price of 2 is $1. Draw a budget line. Now draw the new budget lines according to each of the following changes in prices and income.
(i) The price of good 1 decreases from $2 to $1
(ii) The price of good 2 increases from $1 to $2 and income increases to $20
(iii) Both prices are doubled but income is tripled
You have a credit-card debt of $16,986 and the interest rate you are paying is 14%. You have been making the minimum monthly payment (assume that the minimum monthly payment is 1.8% of the remaining balance) and you are not continuing to make cha..
A company estimates its annual expenses, Y, in dollars from Y = 0.235X^2+7X+4 and annual revenue in dollars from 0.215X ^2+ 16X where X is annual units sold. Find the value of X that gives maximum profit. Round to nearest integer
You are the manager of a small pharmaceutical company that received a patent on a new drug three years ago. Despite strong sales ($200 million last year) and a low marginal cost of producing the product ($0.45 per pill), your company has yet to show ..
A game everyone knows is coin flipping. Suppose that Player 1 flips the coin (and is so skilled that he is able to flip it whichever way he wants) and Player 2 calls heads or tails. Does either player have a dominant strategy? If so, which player and..
Suppose that the government increases taxes and government purchases by equal amounts. What happens to the interest rate and investment in response to this balanced-budget change? Does your answer depend on marginal propensity to consume?
Many observers claim that “fee-for-service” payments create incentives for physician to employ higher-cost treatments. Is this an intrinsic feature of FFS payment systems? If so, explain why. If not, what is the correct way to view the financial ince..
Compute the t-statistics for each variable and explain what is inferences can be drawn from them.
Discuss how government intervention promotes efficiency and equity in the economy. Be sure that you include restraint of trade, indirect costs, deregulation, and overregulation within your analysis.
What should you do to maximize profits with respect to prices after you acquire a substitute product.
What is your bottom line in negotiations with the telecom? Suppose you agree on a price slightly above your bottom line.
Suppose that consumer price index at year-end 2011 was 150 and by tear-end 2012 had risen to 160. What will be the inflation rate during 2012?
Malpractice Lawsuits involve medical error: a negligent act by a healthcare provider that falls below the expected standard of care. These acts can be very costly to the healthcare industry. Medical Malpractice Law in the United States (2005) describ..
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