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Economic Efficiency
Shortages of resources such as water, food, and building supplies are a problem many communities face after a natural disaster occurs. Some communities have even enacted laws to prevent “price gouging,” the practice of asking very high prices for products in short supply after a natural disaster.
Discuss how “price gouging” might lead to Pareto improvements.
Is legislation preventing price gouging fair? Is it a good idea?
q.suppose the cfo of an american corporation with surplus cash flow has 90 million to invest and the corporation does
A price-taking firm selling in a market with a price greater than the firm’s average total cost should:
Metro Airlines runs 10 flights per day at a total cost of $50,000, which includes $30,000 in fixed costs for airport fees, airplanes, and the reservation system and $20,000 invariable costs for flight crews, fuel, baggage handlers, and food service
New manufacturing technologies are often viewed as labor saving in nature. Using a production possibilities frontier with manufactured capital goods on one axis and labor-intensive goods on the other axis.
If Jane gets one year of college she will earn $20 per hour. If Jane gets two years of college she will earn $22 per hour. If Jane gets three years of college, she will earn $24 per hour. If Jane finishes college, she will earn $25 per hour. Jane’s d..
Suppose that the level of capital in the economy is 200 units, the depreciation rate is 10%, and the level of investment is equal to 10 units. In this case:
The graph also shows the marginal revenue curve faced by this firm. Elucidate how much profit does the monopolist earn.
Evaluate the argument that monetary policy should be determined by a rule rather than discretion. How about fiscal policy?
Suppose that during the past year, the price of a laptop computer fell from $2,650 to $2,430. During the same time period, consumer sales increased from 495,000 to 664,000 laptops. Calculate the elasticity of demand between these two price–quantity c..
Bud Owen operates Bud's Package Store in a small college town. Bud sells six packs for off-premises consumption.
q.the long-run cost function for leanns telecommunication firm is cq 0.03q2. a local telecommunication tax of 0.01 has
Now suppose Alex's income increases to $1,500 per year. What is her new optimal consumption of x? What is her new optimal consumption of z?
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