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In July, the Department of Justice opened an investigation related to possible collusion and price fixing. What created the suspicion of collusion? Also research this case and share some details. What is currently happening? The Airline industry is not a monopoly, there are a number of companies involved. How can an oligopolist violate antitrust laws?
The economy is made up of C and I and is currently at full employment. If consumption is $5 trillion while savings is $1 trillion, what is current investment according to the Classical economists? Suppose consumption falls by $500 billion what will h..
Hotelling’s Model (10pts) Consider the Hotelling’s model with three players, each chooses a policy position on the real line. Is all three players choosing xm (the ideal policy of the median voter) a Nash equilibrium? Explain your answer.
A county is considering using a piece of park land for one of two alternative recreation projects. Project S would require construction costs of $2 million (year 0) and generate net benefits of $1 million per year for 10 years.
Suppose a single firm produces all of the output in a contestable market. The market inverse demand function is P = 250 -5Q, and the firm’s cost function is C(Q) = 6Q. Determine the firm’s equilibrium price and corresponding profits.
If an economy is producing at a point on its production possibilities frontier, it is:
(Long-Run Industry Supply) Why does the long-run industry supply curve for an increasing-cost industry slope upward? What causes the increasing costs in an increasing-cost industry? What are the major characteristics of perfectly competitive market? ..
When General Motors devotes $1 billion to new investment (e.g., building new factories, warehouses, offices), who does the saving that is required? Stockholders? Workers? The public? Buyers of cars? It is estimated that the value of our private capit..
Economic growth has slowed in the last quarter of the year to 0.6% from the previous third quarter growth rate of 4.9%. The economy lost 12,000 jobs in the last month of the previous year while shedding 80,000 jobs during the months of January and Fe..
The initial cost of machinery for producing a certain item is $50,000. The machinery will have a five-year life with no salvage value. The manufacturing process has a fixed cost of $5,000 per year and a variable cost of $16 per unit. At an interest r..
One of your friends works at the local water utility and another works at a particular fast food restaurant. Both are considering raising their price to increase revenue and ask for your advice. Which of them would likely be more successful in increa..
The insidious nature of anorexia creates strong resistance to weight gain and all strategies to promote weight gain, even in the face of permanent, lifelong physical ailments and even death. Considering this dilemma, do you believe that someone has t..
An ice cream company has hired two sales persons to run two ice cream stores on a beach. These two employees will receive a fixed salary regardless of the number of ice creams that they sell and they have to charge the same price set by the company. ..
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