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The ABC movie theater has 300 seats. In a typical month, 25 percent of the seats are sold. The price elasticity is estimated to be -0.9. The price of a ticket is $8.00. The manager wants to increase the attendance to 30 percent. What price should he charge per ticket? (Note: Use the arc elasticity formula.) Is this a good strategy? What would be your recommendation?
According to an article in the New York Times, in 2011 the Port Authority of New York and New Jersey was planning to increase the tolls on the bridges and tunnels crossing the Hudson River by as much as 50 percent. According to the article, “Revenue ..
Illustrate what does the difference in the relative black-white wage ratios across regions indicate that Southern employers discriminated more than Northern employers.
Which of the following statements best describes the concept of a binding price floor. Suppose that the equillibrium price of donuts is $1.00 per donut.
In this module, we focus on growing interest rate “spreads” as portending possible recession. In preparation for this discussion, research the issue of consumer confidence. Document one or more methods used to characterize and measure consumer confid..
Kaiser Permenente Healthcare is negotiating with two hospital groups for inclusion in its network. Suppose that the “value” or “surplus” created by including one hospital group is $80 million, while the value of including both hospital groups is $120..
What is this firms total cost function, average cost function, average variable cost function and marginal cost function.
In "That First Credit Card," what decisions could Ms. McLeod have made differently to avoid ending up in the situation she ultimately faced? When you faced similar choices, what decision did you make and what has or will be the results of those decis..
In signalling games, it seems that the Cho Kreps refinement (intuitive criterion) is the go to refinement for eliminating bad sequential equilibrium. Divine equilibrium and perfect sequential equilibrium are also interesting refinements though. Are t..
Explain the Mutiplier Effect. Try to explain it in some detail so that someone who did not know anything about economics would be able to gain a fundamental understanding of it. Use a visual aid to help the observer understand the concept.
What is the effect of the corporate income tax on the investment level of a perfectly competitive corporation that finances its investment by debt (with deductible interest) and has no adjustment cost of investment?
Suppose the economy is at full employment with expected inflation rate 7% and nominal interest rate 11%. Suppose now that the expected inflation rises to 9%. After this change. What is the nominal interest rate? What is the real interest rate?
We know that GDP has four components: consumption (C), investment (I), government purchases (G) and net exports (NX). If we let Y stand for GDP
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