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Suppose your favorite band is on tour and coming to your area. Tickets are $100, and you take a day off from work, which you would have earned $60. What is your opportunity cost of going to the concert?
The demand curve for a product is estimated to be given by the expression: q = 200 − π Calculate the price and the price elasticity of the demand for the following values of the demand: 0, 50, 100, 150 and 200. Repeat these calculations for the case ..
In recent years Sweep Programs have grown throughout the U.S. With this financial innovation, banks automatically sweep excess funds from their customers’ checkable deposits into interest bearing MMDAs, which are part of savings and time deposits.
Suppose there are two type of customers for a comic book store. The owner has conducted interviews and concluded that there are around 50 customers each with a demand curve P = 20 - 5Q and another 20 each with demand curve P = 20 - Q, where P is the ..
If insurance premiums are going to be set below the actuarially fair level for a certain group, who will likely be targeted to make up the difference?
State and briefly explain internal and external economies of scale. Also, distinguish between two types of agglomeration economies (urbanization and localization) by giving examples of such from your general knowledge of the subject. - Justify the pr..
A company produces two main products: electronic control devices and specialty microchips. The average total cost of producing a microchip is $300; the firm then sells the chips to other high-tech manufacturers for $550. Should the company produce co..
When networks are important the “best” products usually win. Network goods are usually sold by monopolies or oligopolies. Standard wars are common in establishing network goods.
Draw a set of indifference curves that would make it optimal for him to work 4 hours of overtime each day.
Supposed a proposed public policy could result in three possible outcomes: If the probability of each outcome is, respectively, 0.85, 0.10, and 0.05, should the policy be pursued or not? Explain.
Draw a graph showing a monopolistically competitive firm in a long-run equilibrium. What are its profits? Suppose instead that a monopolistically competitive firm sells 5 units of a product, for $4/unit, at an average total cost of $2/unit. Calculate..
Critics argue that countries relying on primary exports will experience problems of fluctuating and declining terms of trade. Explain the theory and evidence behind these arguments, and how these problems can reduce the gains from primary export t..
Economies of scale can be quickly exhausted not everyone wants to ‘shop' from same ‘store' size can also mean diseconomies of scale if focus Is lost and conflict of interest what matters to shareholders is profitability not Challenges (contd.) Do..
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