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Q1. Laura bought word -processing software in 2005 for$50. Laura's twin brother, Laurence, buys an upgrade of the same software in 2006 for $50 what problem in the construction of the CPI dose this situation best represent.
Q2. The market demand and supply function for VCR movie rentals are: QD= 10 - 0.04p and QS 3.8P = 4. Calculate the equilibrium quantity and price and point elasticity of demand in equilibrium. Next, calculate producer surplus. Suppose that VCR movie rentals are taxed at $ 0.25 per unit. Calculate the revenues generated by the tax. Calculate the loss in producer surplus. What percentage of the burden of the tax falls on producers?
Assume that the industry wants to expand and has to make some long-term capital budgeting decisions. Now the industry is confronted with government regulations to oversee the merger.
Explain why government regulation is or is not needed, citing the major reasons for government involvement in a market economy. Provide support for your explanation.
The cost leadership approach implicates competing by having a lower cost than one's competitors
Store maximizes profits and the price elasticity of demand for milk is -2 for coupon users, what is the price elasticity of demand for non-users.
Calculate the purchasing power parity exchange rate between the Swiss franc and the dollar. Based on your calculation, is the SF overvalued or undervalued.
The biggest difference between Microsoft and software retailers is the market structure in which they operate.
The banking system is a fractional reserve banking system with a desired reserve deposit ratio. Banking system is a fractional reserve banking system.
As an analyst at the Treasury Department, you have been asked to predict the behavior of key macroeconomic variables for different scenarios on the state of policy between the US and Europe.
Board of directors has directed you to choose an output level that maximizes the firm's profit. You have an incentive to maximize profits because your job and salary depend on the profit performance of this company.
Michael spends $10 a month on both Pez dispensers and Superman action. His marginal-utility-to-price ratio for the Pez dispensers is 40.
Assume that during the last month of the tenth year of ownership, the property in Problem 2 is sold for 1,500,000. Assume also that the seller incurs transaction costs equalling 6 % of the sales price.
Avoid having developed economies regress to a Smoot-Hawley type of isolationism or protectionism to avoid job losses in import-competing sectors.
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