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Andrew has decided to open an online store that sells home and garden products. After searching around, he chooses the software company Initech to provide the software for his website since their product required the least amount of specialized investments for him to use it. They agreed upon price of $7,000. To use Initech’s software, Andrew makes $2,600 in sunk capital investments and spends 70 hours learning how to use Initech’s software, which is very different from other software packages. Both Andrew and Initech view Andrew’s time as worth $32 per hour and Initech is fully aware of the investments Andrew must make to use their product. After Andrew’s investments were made, Initech came to Andrew and asked for more money. How much do you think they asked for?
explain how an active policy differs from a passive policy. how does monetary policy affect aggregate demand in the
A company that specializes in online security software development wants to have $85 million available in three years to pay stock dividends. How much money must the company set aside now in an account that earns interest at a rate of 8% per year, co..
which of the following examples is an adverse-selection problem and which is a moral hazard incentive problem?nbsp
salt inc. just constructed a manufacturing plant in ghana. the construction cost 9 billion ghanaian cedi. salt intends
Regulators are considering controlling the emissions from two local power plants. The marginal benefits (the demands for effluent) derived by these plants from being able to produce a given quantity of effluent are 10,000-Q1 for the first plant and 1..
consider a landscaping service market. here landscaping means mowing weeding and trimming etc i.e. a regular
A pump cost $29,238 when it was purchased. The cost to operate the pump were $500 the first year and increased $50 per year for each of the next 10 years of the life of the pump. The pump has a salvage value of $5675 today, at the end of its 10 year ..
Select a product or service you use on a regular basis and discuss how the price you pay for that product or service is the result of a market economy. Discuss how the determination of the price for that same product or service would be set in a c..
One of the partners favors moving downtown because she believes the additional business gained by moving downtown will exceed the higher rent at th downtown loaction plus the cost of making the move. THe other parnter at the PBS opposes the moves.
In the aftermath of September 11 terrorist attacks, the quantity of sold airline tickets in 2002 fell by a large percentage when compared to 2001. During the same time period the average price for airling tickets also fell.
A monopolist is currently producing a level of output where Price = $110; Marginal Revenue = $10; Quantity = 100; Total Cost = $15,000; Marginal Cost = $10; Total Fixed Cost = $4,000.To maximize profits in the short-run, the monopolist should do.
suppose that instead of holding prices fixed as we did in this problem that prices were perfectly flexible as in a
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