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While you were an intern you bought 5 packages of hot dogs a month. After acquiring a full-time job with a considerably higher salary, you stopped purchasing hot dogs. Explain this behavior. 7. An investor has to choose between stocks A&B, each selling for $10. Stock A, can either increase in price to $12, with a 50% probability or stay at $10 with a 50% probability. Stock B can either increase in price to $15 with a 50% probability or go down to $7 with a 50% probability. Which of the stocks would the investor choose?? 8. Peter’s Pizzeria sells both pizzas and wings. It wants to increase the sales of its pizzas. If the price of the wings increase, what economic concept does Peter assume? Explain. 9. Explain the indifference principle and provide an example. 10. Explain what happens both long and short term when a sudden increase in market demand occurs in a competitive industry.
Two hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the formula TC = 500Qmill + (Qmill) 2 where Qmill indicates the mills annual production in thousands of tons. The marginal cost o..
Briefly explain the term post investment holdup. Give an example. How can this problem be solved (Give any one brief solution)
The gains from specialization and trade are based on comparative advantage, which reflects the relative opportunity cost. When countries specialize in producing goods and services for which they have comparative advantages, total production in the gl..
Suppose a government has an initial debt of $5 trillion and the nominal rate of interest is 5%. if government keep primary budget in balance, what is the growth rate of its debt? if government keeps its total budget in balance, what s the growth rate..
Amalgamated Popcorn, Inc. is a fairly small firm selling bags of flavored gourmet popcorn in a popular mall. Compute the elasticity coefficients for price, advertising, income, and cross-price. You are currently paying $.45 for popcorn (including co..
The head of the accounting department at a major software manufacturer has asked you to put together a pro forma statement of the company's value under several possible growth scenarios and the assumption that the company’s many divisions will remain..
What is the dollar value of the invoices in exercise 13 if the dollar: a. depreciates 10 percent against the Australian dollar b. appreciates 10 percent against the British pound
Modern comparative economists would object to the definition of economic systems only in terms of property ownership arrangements,
There is no evidence that the bar owners ever directly communicated. Do you think this is a violation of Section 1 of the Sherman Act?
The World Bank Doing Business Indicators measure the extent of business regulations in countries around the world. Compare the U.S., France, Japan, Brazil, and Nigeria in terms of how easily contracts are enforced, how property can be registered, and..
in managerial economics applications strategy and tactics if contract promises were not excused because of acts of war
What are the advantages of buying a business rather than starting one from scratch? What are the advantages and disadvantages of owning a franchise?
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