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Suppose the price of capital falls relative to the wage rate and, as a result, the demand for labor increases. Are these inputs gross substitutes, or are they gross complements? What can you infer about the relative strengths of the output and substitution effects?
A company plans to invest $12,000 dollars on new equipment with an 8 year life to reduce operating costs. It is estimated that the savings will be $4,000 the first year but decrease by $400 each year for the remainder of the equipment's life. Determi..
Using the Internet, research the influenza vaccine, or "flu shot." Use the following to guide your research: What are the economic benefits of the flu shot? Describe one (1) reason why the private market for flu vaccinations would produce an ineffici..
Incomplete information frequently lowers the average quality of products and services exchanged in markets. This phenomenon, at times called the "lemons problem," explains why the supply of lower-quality products increases relative to higher quality ..
Consider a market characterized by the following inverse demand and supply functions: PX = 40 - 4QX and PX = 10 + 2QX. Compute the surplus received by consumers and producers. Other things held constant, the higher the price of a good. Suppose both s..
Which of the following is true regarding spot transactions?
Wal-Mart is often criticized for importing many of the goods they sell. Why do they buy goods from foreign markets.
Define and identify the market for each of the following products in terms of (1) market scope (local, regional, national, international ( state your reasons why you classify them as local, regional, national or global in scope), (2) likely character..
When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public," and the market for such stock is called the new issue market.
For each of the following purchases, say whether you would expect the degree of imperfect information to be relatively high or relatively low: Why is there asymmetric information in the labor market? What signals can an employer look for that might i..
Cathy has one year left before she completes her degree in industrial engineering. She is spending this summer working for her family's firm, MMM (Molehill & Mountain Movers). MMM runs a fleet of heavy construction equipment and sells gravel for road..
Looking at the circular flows model, how can the saving equals investment equation be derived?
Joneas recently moved from a comission-based sales job which his income flucated somewhat unpredicately from on month to the next to a salary-based management position where he recevies a fixed paycheck each month. Complete the following statement ab..
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