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As we all know that at present it is not legal for parents who wish to adopt a child to pay the birth mother for, or to offer to pay for, the babies they adopt. [Adoption agencies do charge for their services, of course.] Use economic theory to analyze the (potential) market for adoptive babies and answer this: what would happen if such payments were allowed? (Draw yourself a supply-and-demand graph to help you think about this question.)
What is the machine's payback period? Compute net present value of machine if the cost of capital is 12%. Find out the expected internal rate of return for this machine?
What would be the equilibrium quantity and equilibrium price? Assume the Government imposes a $5 per unit tax on the seller, which equation would be affected and how?
Define the term Consumer surplus, Gien good and Income elasticity of demand using graph and equation.
Derive the firm's supply curve, expressing quantity as a function of price. Determine the market supply curve if North Carolina Textiles is one of 1,000 competitors. Compute market supply per day at a market price of $47 per unit.
The effective capacity and efficiency for next quarter at MMU Mfg. in Waco, Texas, for each of three departments are given below. Compute the expected production for next quarter for each department.
Describe the difference between a monopoly and an oligopoly, and a cartel and provide an example of the monopoly, an oligopoly, and a cartel and write down the welfare effects of monopolies and oligopolies.
The long-run aggregate supply curve is vertical at economy's potential output level. Why is the long-run aggregate supply curve situated at his level of output rather than below or above the potential output level?
Consider the production function Q=100L^.5K^.4. Suppose L=1 and K=1 so that Q=100. Explain the nature of returns to scale for this production function.
You've been hired by an unprofitable firm to determine whether it should shut down its unprofitable operation. Help the management of the firm as to whether or not it should continue to operate at a loss?
What are three main factors of production? Who are the main economic decision makers in a Markey system? Can firms and households resolve problems by cooperating with each other?
Compute the weighted average cost of capital using book value weights. Compute the weighted average cost of capital using market value weights. Compare the answers obtained in parts a and b. Describe the differences.
Find Total Revenue or profit
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