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A packing company uses two inputs: labor and glue. Suppose the work costs $ 10 / hour (salary) and the glue costs $ 5 / gallon and that the company has a budget of $ 100,000. Draw the line on lined paper isocost for the company. In the same diagram, draw a curve isoquant indicating that the company cannot produce more than 1,000 containers that budget.
With regard to the above question, assume that the salary increases to $ 20 / hour while the glue price increases to $ 6.00 / gallon. How to change the optimal ratio between inputs as a result of these changes? What would happen to the path of expansion of the company?
Subway charges a higher price for the 6-inch Veggie Delight Sandwich sub in New York City than it does in a small town in Iowa. Consumers collected coupons from free newspapers and magazines and take to the store to save money on products.
Assume that the following data characterize the hypothetical economy of Trance: money supply = $190 billion; quantity of money demanded for transactions = $160 billion; quantity of money demanded as an asset = $10 billion at 12 percent interest, incr..
Is the current Monetary Policy expansionary or contractionary? Why? What effect doe the Federal Reserve expect this policy to have on the US economy?
Illustrate what is the minimum price necessary for this firm to produce any output in the short run.
A portfolio has an average return of 12.4 percent, a standard deviation of 15.8 percent, and a beta of 1.35. The risk-free rate is 2.6 percent. What is the Sharpe ratio? Your portfolio has a beta of 1.17, a standard deviation of 14.3 percent, and an ..
Discuss whether perfect competition is more efficient than regular unregulated monopoly, regulated monopoly, and natural monopoly? Justify your answer using real world examples.
What is the rationale for subsidizing some telecommunications services (such as Internet access) for some people and institutions? Discuss. How would Ramsey suggest that policymakers resolve the tension between universal service policies on the one h..
Which MACRS (Modified Accelerated Cost Recovery System) depreciation method is used to provide a lesser extend for tax deduction purpose?
Suppose you are studying the market for shoes. Two events take place simultaneously. First, price of leather decreases, and second, consumers' income increases. What will happen to the equilibrium price and equilibrium quantity of shoes?
How do we graphically represent the utility maximizing bundle that consumers can afford?
Explain briefly why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation.
The country of Alcazar has been growing at an impressive pace for the last five years. With improvements in technology, many industries have recorded remarkable growth in productivity. The health sector which has the lowest level of productivity empl..
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