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The CEO of a major automaker overheard one of its division managers makes the following statement regarding the firm’s production plans: ”In order to maximize profits, it is essential that we operate at the minimum point of our average total cost curve”. Do you agree with the manager?
You observe a positive relationship between price that your store charges for CDs and total revenue from CDs. Is demand for your CDs elastic or inelastic.
When a best-selling book was first released in paperback, the Hercules Bookstore chain seized a profit opportunity by setting a selling price of $9 per book. With paperback demand given by P = 15 - .5Q, the chain enjoyed sales of Q = 12 thousand book..
The Truck Stop is a repair facility specializing in the maintenance and repair of diesel engines just outside of Carlisle, Pennsylvania--one of the largest trucking hubs in the U.S. Mechanic and staff salary expenses are estimated on an hourly basis,..
Danny “Dimes” Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $2.25 each, he sells 100. At a price of $1.75 each, he sells 300. If demand had the same elas..
A farmer uses a piece of land with the following accounting costs to grow a crop worth $1800. If a normal rate of return is $100 on such an investment, what will the value of the land be for use during this time period?
Cater enterprises can issue floating-rate debt at LIBOR + 2.50% or fixed rate debt at 9.50%. Brence Manufacturing can issue floating-rate debt at LIBOR + 4.60% or fixed rate debt at 11.00%. Suppose Cater issues floating-rate debt and Brence issues fi..
Elucidate why from an economic point of view towing a car illegally parked rather than just ticketing it provides a better incentive.
The presence or even the threat of prize freezes (i.e. price controls) may induce firms to integrate vertically (to merge with “upstream” supplier firms or with “downstream” customer firms). Explain why.
Elucidate why does strong mono tonicity implies local non satiation but not vice versa
use the shifts of appropriate curves to show why the combination of rising incomes plus price ceilings produced shortages and lines. Finally, show what happened when price controls were removed.
Why do more than 45 million Americans not have Health Insurance? Argue whether or not you feel that Health Insurance today should be either Public or Insurance driven? Discuss with two other students your reasoning.
Assume that with probability q, the consumer is a patient person. So he will visit both sellers and compare the two prices. With probability 1 − q, the consumer is impatient and will randomly visit one -1- ECON101 Winter, 2016 of the two sellers with..
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