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1. Briefly explain 2 ways moral hazard is welfare improving if there is price-ceiling in a competitive market. No diagram necessary.
2. The short-run marginal cost curve passes through the minimum point of the short-run average variable cost curve.
True or False
Think about a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk, shoes, manicure/pedicure, video game, etc.)
A small start-up company invested in a new plant with an initial cost of $10 million. Operating costs for the plant were $3 million per year for 7 years. There was a special one-time charge of $1 million in year 2 to correct unexpected equipment prob..
Aside from maximizing profits, assess the factors that managers must consider when making the decision to outsource or integrate forwards or backwards considering which factor would be most influential for decision-making.
Evaluate the financial performance of the company using the information providedin scenario. Consider all the key drivers of performance, such as company profit or loss.
According to Purchasing Power Parity, if a country has a relatively high inflation rate then its currency should be depreciating. Explain.
Why does it make sense for a firm to shut down in the short run if the price falls below minimum average variable cost?
The aggregate demand function for donuts is given by D(P) = (131/2) - (p/2) and the aggregate supply function is given by S(P) = (p/7) - (5/7). Suppose that the market for donuts is perfectly comeptitive. What are the equilibrium price and quantity? ..
How did invention of crack cocaine transform the urban street gang. According to the data cited in this chapter, civil rights laws and a shift in the attitudes in the United States regarding race helped to improve the status of black society. How d..
When government spending increases by $1, planned expenditures increases by $1 and the equilibrium level of income will increase by $1. When taxes are cut by $1, planned expenditures increase by less than $1, and the equilibrium level will increase b..
A local community bus service, the only bus service in the market (i.e. a monopoly), charges $2.00 for a one-way fare for all riders. The city council is thinking of raising the one-way fare to $2.50 for all riders. If the city council increases the ..
Suppose there are n identical firms in a market. Each firm’s cost function is given by C = 25 + q2, where q is the amount that an individual firm produces. How much output will each of them produce? What will be the market price? How many firms will ..
Think of a good product that you have purchased recently. If the price of this item increases, how would this affect the quantity of the good that you consume? Is the Demand for this good Price elastic or Price inelastic? Using specific examples, rel..
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