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You run a chain of movie theaters, so you commission a marketing study that categorizes your potential customers into 10 equal-sized groups according to what they're willing to pay for a movie, ($10,$9,$8,$7,$6,$5,$4,$3,$2,$1). It turns out that the low-value customer groups, those with values ($5,$4,$3,$2,$1), are all over 65 years old. All the costs of exhibiting movies are fixed except for the $3.50 royalty payment you must make to the film distributor for each ticket sold.
What price should you charge for movie tickets?
Should you offer senior citizen discounts? If so, how much?
Illustrate what new decision will you make regarding production levels and pricing for your Widget facility.
What is value of marginal propensity to consume (MPC) in this model Marginal propensity to save (MPS).
What happens to the price level pt when the money growth rate m changes, holding the current money supply mt constant?
If the demand curve is much more inelastic than the supply curve, clarify whether buyers or sellers will shoulder more of the tax burden from a new tax placed on the sellers.
Elucidate why are shortages or surpluses more likely with preset costs, such as those on tickets, than flexible costs
The Circular Flow diagram is model of how the economy works. Explain how the model would change if the following events ocurred:Households increase savings.
Then do similar for every of the determinants of supply in Equation 2.2. In every instance, would equilibrium market price increase or decrease.
Explain why each of the following example is not a perfectyl compertitive industry
Illustrate what can you conclude about the structure of the industry in which this firm is operating.
Assume that the central bank refuses to change the interest rate from 10%. In this case, illustrate what is the new level of output. What is the money supply.
Illustrate what is the present worth of the planned expenditures at an interst rate of 10% per year.
How does monetary policy affect the US production and employment? How has the US current economic situation affected you and your family.
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