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Your product fails about 2% of the time, on average. Some customers purchase the extended warranty you offer in which you will replace the product if it fails. Would you want to price the extended warranty at 2% of the product price? Discuss both moral hazard and adverse selection issues.
Suppose the market for good X has a four-firm concentration ratio of 0.50. Furthermore, assume that total sales in the industry are $1.2 million. Based on this information, we know that sales for the largest four firms in the industry equal (in aggre..
What appears to be major constraint that central banks used to determine limits of monetary injections into economy. Did United States use same or different criteria.
Elucidate how do the firms decide how much to charge. Use the Cyberlibrary or internet search engines to pick your own example of price discrimination.
BP Oil is in the process of replacing sections od its Prudhoe Bay, Alaska oil transit pipeline. Illustrate what required return does the project become financially unacceptable.
q.in the standard keynesian framework in open economy macroeconomics the supply is assumed to be perfectly elastic and
Which of the following represents a short-run decision? A farmer discovers that the total cost of growing 2000 acres of corn is $400,000 and that the total cost of growing 2001 acres of corn is $401,000. The marginal cost of the 2001st acre of corn i..
Two methods of filling cereal boxes are being compared. Both methods fill the box with the same amount of cereal on average so the company wants to select the method with the lower variance. In a sample of 31 boxes filled using method 1, the standard..
If the government were to increase taxes on gasoline, what will happen to the total government revenue? Why? What are you assuming about the elasticity of the demand curve of gasoline? What is the formula for elasticity?
Suppose also that ham and cheese are the only goods that this person buys and that bread is free.
The national bureau of economic research in December 2010 reported a study by Elizabeth Wilde, Lily Batchelder, and David Ellwood that a highly skilled woman loses anywhere from $230,000 to $349,000 in lifetime earnings by having children. What are t..
Explain the entities affected by social regulation. My question is Illustrate what do they mean by the word "entities"?
At any point to the right of the IS curve, total leakages must exceed total injections. If velocity is rising, then the demand for money must be falling. The transactions motive for holding/demanding money is related primarily to the fact that money ..
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