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assume that each consumer seeks the highest indifference curve possible.
The budget line gives the combinations of two goods that the consumer can purchase with a given budget.
List and briefly describe the two conditions that satisfy utility maximization when selecting a combination of two goods.
Suppose the market shares of the six largest firms in the industry are 12 percent each. Compute the six-firm concentration ratio and Herfindahl-Hirschman index for this industry.
explain how rent seeking can lead to a drop in productin of goods and services. what role might the underground economy play in lessing the drop in productie activities
Some states are planning that ethanol be mixed with gasoline to comply with anti pollution laws. Ethanol can be made from corn. Determine what effect are these rules having on the equilibrium price and quantity of corn?
Describe the difference between “money market” debt instruments and “capital market” debt instruments, and provide at least 2 examples of each type. Hint: See chapter 2 of the text.
The Tax Reform Act of 1986 eliminated the deductibility of interest payments on consumer debt mostly credit cards and auto loans but maintained the deductibility of interest payments on mortgages and home equity loans.
What is the internal rate of return on this investment? Assume that the cab is paid for at the beginning of the ?rst year, but that the annual cash ?ows happen at the end of the year.
Draw a standard supply and demand diagram which shows the demand for new housing units that are purchased each month, and the supply of new units built and put on the market each month.
Which industry is more highly concentrated: one with a Herfindahl index of 900 or one with a four-firm concentration ratio of 78 percent?Assume that each of the remaining firms controls 1% of the market. How would you describe its market structure?
Briefly list and elaborate on the factors that will be affecting the demand for the following products in the next several years. Do you think these factors will cause the demand to increase or decrease?
Name some areas of business in the United States where the prevailing market structures have changed dramatically in last 20-years and discuss the direction of change
Economists who align more with the "Classical" school would have a "leave it alone" (Laissez Faire) attitude and would oppose active policymaking. "Rational Expectations Theory" (a "new classical approach") suggests that people figure out what wil..
Suppose the recipient of a kidney transplant has stated that she would prefer 5 years of perfect health to the 10 years she expects to live with her transplant.
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