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Suppose that for a firm that digs ditches for laying cable or pipeline, backhoes and backhoe operators are pure complements in production, being used on a one-for-one basis. Draw the isoquants (on a graph with backhoe, “K”, and backhoe operators, “E”, on the axes) for the production of three different quantities of ditches. Do they have a “funny” shape?
a) Now consider one such ditch-digging firm that has five backhoes but employs six backhoe operators. Can you explain why this might make sense? (Hint: think about whether/how the marginal product of the sixth backhoe operator could be positive)
b) Now suppose you see another ditch-digging firm that has seven backhoes but employs six backhoe operators. How could this make sense?
What is the equation for the AS curve. What restrictions on the parameters do we need to ensure that AS curve has a positive and nite slope.
Explain any additional variables that may improve the coefficient of determination. Based on the forecasting demand, determine whether Dominos should establish a restaurant in your community. Provide a rational and support for the decision.
After 1, 2, and 3 years, it will pay a dividend of $5.You expect to sell the stock after 3 years for $120. Is XYZ a good investment. Support your answer with Calculations.
If in an economy a $120 billion increase in consumption spending creates $120 billion of new income in the first round of the multiplier process.
Illustrate what are differences and similarities between investment multiplier and a consumption multiplier. Explain how is MPC different than multiplier. Explain illustrate what is use of each one in economy.
Analyze the effect of both a bad weather and the rumors od a deadly disease in the consumption of rice?
Which of these types of firms can earn a positive economic profit in the long run.
In 2008 the Federal Reserve took pretty extraordinary measures in an attempt to stabilize the economy. You need both equations and clearly labeled graphs (separate graphs for each question) to answer the following questions. Assume that b=1 and that ..
You are given the following information about the economy of Nocoin: The banks have submitted of $300 billion, two thirds of which is in deposits with the central bank.
Illustrate what evidence does GI present to support the view that Canada had entered a recession
Using supply and demand and competitive analyses, explain what happens to a pharmaceutical company's revenues and profits from an individual drug once it loses its patent protection.
Take a position on whether or not companies benefit from using a structured profit approach to calculate their profits. Provide an explanation of your position with at least two examples or scenarios of the use of such an approach.
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