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Microsoft Word - Problem Set 2_vf
Suppose that consumers are all risk neutral and so they do not purchase health insurance. The equilibrium price of a doctor visit is $30, the supply of doctor visits is perfectly elastic, and the aggregate demand for doctor visits is given by Q=200-5*P. Calculate the effect that universal perfect health insurance (that is, coinsurance rate=0) would have on social welfare.
Why does Vellus export through local distributors rather than set up its own sales force in country? What are the risks associated with using local distributors? How can these risks be reduced?
In deriving LM curves, holding the real money supply constant while raising real GDP causes us to
A certain engine lathe can be purchased for $330,000 and depreciated over three years to a zero salvage value with the SL method. This machine will produce metal parts that will generate revenues of $220,000 (time zero dollars) per year.
what is the current macroeconomic situation in the u.s. e.g. is the u.s. economy currently concerned about unemployment
Assume that the supply of bauxite (the ore from which most aluminum is produced) is Qs = 5P - 15 + sigma. where variable a represents an exogenous supply shifter. The demand for bauxite is Qd = 39 - P. For parts (a)-(d). Assume that sigma=0.
How does price elasticity of demand affect how much of a tax is passed on to the consumer and how much is absorbed by the seller. Show the effect with graphs.
Explain how permanent shifts in national real money demand functions affect real and nominal exchange rates in the long run.
Regression examples that we have seen included explanatory variables such as income, price of the good, prices of related goods, and geographic area. Assume that you have been asked to forecast demand for your company's new product, signature t-sh..
Consider the following firm with the production function Q=F(L)=2L^1/2. L=labor. Wage w=12. Fixed costs are FC=500(sunk cost). Derive the short run cost function. Graph this function using excel.
What factors (determinants) will cause a change in demand and what factors (determinants) can cause a change in supply? Can you give any current examples of a determinant of demand that you see changing in any industry or marketplace or a determinant..
What do you believe are the opportunity costs of reducing expenditures compared to the option of raising prices?
Long-run real interest rates are expected to increase. An accountant and an MBA student (who just finished his course of Managerial Economics) where interviewed regarding the effect on the firm they both work at. Keeping all else constant, their answ..
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