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How does a low-cost price leader enforce dominance through implied threats to competition? Anyone has a example of the startegy used for this?
Many U.S.? cities, especially those with large populations of? renters, have rent controls. Suppose that San Francisco sets a rent control of $400 per month on? one-bedroom apartments. The graph on the right shows this situation.
Suppose that, in the course of a regular check-up, a doctor discovers that the patient has a potentially cancerous lesion. Most lesions are benign (non-cancerous), say 99%. The doctor orders an x-ray just in case. How is this mistake an example of re..
Suppose the government increases both taxes and government purchases by $10,000. Assuming that the marginal propensity to consume is 0.75, calculate the change in private saving, government saving, and total saving. Then draw a graph of the loanable ..
What is the payoff table? If the firms act independently what advertising level should each choose? Could the firms profit by entering into an industry wide agreement concerning the extent of advertising?
Explain why the Fed decreased the federal funds rate during the last two recessions. As you can see from the graph, the Fed raised the federal funds rate in 2004 up to 2006. Again, explain what might have motivated the Fed to act in such a way.
What is the equilibrium income level and interest rate. Suppose there is an increase in t from .15 to .20. What will be the change in the equilibrium level of income and interest rate? Suppose there is a decrease in government expenditures (G) from 1..
Use a supply and demand graph to show the likely impact of subsidized student loans on the price and quantity of student enrolments. Are there other ways in which the subsidies might distort the incentives of university administrators?
Sketch the isoquant corresponding to an output level of 100 units What is the MRTS for this production function? Does the isoquant exhibit a diminishing MRTS?
Are the profits of entrepreneurs obtained through coercion or through persuasion? (definition of terms: coercion = inducing people to cooperate by threatening to reduce their options. persuasion = inducing people to cooperate by promising to expand t..
Household finances are similar in some ways to a nation’s international transactions. Suppose a household consumes (spends) more than its income. What are 3 legal ways it can finance this deficit? Give an example of each. How can a nation that runs a..
Arnold's mechanic, Reid Blank, is able to install new mufflers at an average rate of 3 per hour, or about 1 every 20 minutes. Customers needing this service arrive at the shop on the average of 2 per hour. Larry Arnold, the shop owner, feels that all..
Suppose a furniture manufacturer is producing in the short run (with its existing plant and equipment). The manufacturer has observed the following levels of production corresponding to different numbers of workers
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