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In the short run, a firm cannot vary its capital, K = 2, but can vary its labor, L. It produces output q. Explain why the firm will or will not experience diminishing marginal returns to labor in the short run if its production function is
a. q = 10L + K
b. q = L^0.5K^0.5
Consider that two countries, Brazil and Argentina, have the same rates of investment, population growth, and depreciation. They also have the same levels of capital per worker.
Consider the following possible schemes for taxing a monopoly: A proportional tax on profits. Explain how each of these taxes would affect the monopolist's profit-maximizing output choice. Would the tax increase or decrease the deadweight loss from m..
Why has supply chain management become so important in recent years? What has changed in terms of business and marketing resulting in growing emphasis on the development of relationships and partnerships both upstream and downstream?
Illustrate what does this imply about the effectiveness of monetary and fiscal policy to reduce the unemployment rate.
Illustrate what closing time should Citywide Spirits Shoppe choose to maximize profits.
Show that the following relation holds true sqrt((m - 1)/m) = (QE/Q*) = sqrt((m + 1)/m). What is the underlying reasons that this relation holds? Provide an interpretation of that relation.
From 1983 to 1987, a period of rapid economic growth in the U.S., total savings by contributors to IRAs increased by approximately the amount of their IRA contributions. Does this show that virtually all of their IRA savings were new savings money th..
A hospital bought digital imaging equipment annual payments of $243,000 per year over 8 years. if the interest rate is 13% what will the total amount paid for the equipment be at the end of the eighth year?
How does theory hypothesize that a current account trade deficit will be resolved.
Suppose you were having lunch with your best friend who just enrolled in an economics class. He was complaining about Explain how irrelevant class was, commenting that he saw no useful purpose for economics.
An apparel manufacturing plant has estimated the variable cost to be $21 per unit. Fixed costs are $1M per year. Forty percent of its business is with one preferred customer and the customer is charged at cost (without profit). The remaining 60% of t..
Firm B has invested five years and $6 million in developing a new product. Even now, it is not clear whether the product can compete profitably in the market. Nonetheless, top management decides to commercialize it so that the development cost will n..
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