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If a competitive firm fails to maximize profits, which of the following statements are true and which are false?
a. Price equals marginal cost
b. Price equals marginal revenue
c. Marginal cost equals marginal revenue
What are some of the reasons that the U.S. has greater degrees of income and wealth inequality than other high-income market capitalist economies?
Support your answer with data on the real GDP growth rate, the unemployment rate, and the CPI inflation rate. You may obtain these data from the Bureau of Economic Analysis website
A 10% increase in the price of pizza causes a 10% drop in the quantity of both pizza and beer sold. Describe elasticities and the nature of the two products.
Using the midpoint method the price elasticity of Demand for a good is computed to be approximately
The existence of ability bias causes estimated rates of return to education to _______ the actual rate of return for a typical individual. The existence of ability bias causes estimated rates of return to education to _______ the actual rate of retur..
Explain why consumer ratings are so very important to consumers today. The reality of it is that consumers are willing to take the word of a perfect stranger over that of a credible company. Aside from the profit motives of the company, why is this p..
Indicate whether each of the following is counted in this year’s GDP: You bought a new Wii at GameStop last year and resold it on eBay this year. You purchase an “Investing for Dummies” book at Barnes and Noble. You purchase a historic home using the..
For promotion to lieutenant, police officers in a city police department first have to pass a written aptitude test. This requirement was challenged in court by several black officers on the grounds that the test unfairly discriminated against blacks..
A U.S.-based MNC imports 30 percent of its supplies from Europe. Exports to Europe, which are invoiced in Euros, account for approximately 50 percent of its revenues. Explain how the MNC can reduce its economic exposure to exchange and interest rat..
Consider a Solow model where the production function no longer exhibits diminishing returns to capital accumulation. This is not particularly realistic, for reasons discussed in Chapter 4. Draw the Solow diagram in this case. Suppose the economy begi..
In planning for your retirement, you would like to withdraw $50,000 per year for 20 years. The first withdrawal will occur 20 years from today. What amount must you invest today if your return is 10% per year? What amount must you invest today if you..
If preferences are strictly monotonic then it will be optimal for the consumer to consume all their income (i.e. be on the budget line). Is this still true if preferences are weakly monotonic?
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