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The availability of investment capital is critical for a market economy to grow. Explain how this investment capital is transformed into fixed capital goods, new technology, and cost reduction using new methods of production. Also, explain how interest rates impact the availability of investment capital.
Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. Based on this information we can conclude that Harry's production of large pepperoni pizzas: Which of the following is an example of a supply shoc..
Suppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. Show the short-run effect of this optimism on the aggregate-demand curve. Which of the following reasons could explain why the aggregat..
Three firms produce an identical product. The market demand is as follows: q(p) = Qo if p ≤ 2, q(p) = 0 if p > 2. Production costs are zero for all firms. Each firm has a capacity constraint of 5 units. In each period firms set their prices for that ..
Which of the following is NOT an example of a managerial decision with risk-averse consumers? The expected revenues in auctions with risk-averse bidders with independent private values will be: A consumer spends more time searching for a good when he..
assume that every driver faces a 1 probability of an automobile accident every year. an accident will on average cost
You have been asked by your boss to estimate the cost to purchase a new piece of production equipment. The company purchased this same type of equipment in the past for $15,000. The original equipment had a capacity of 2,000 units, while the new equi..
Articulate your critical rationale for improvements we could/should make to how the marketplace functions: three for how better to protect human rights and three for how better to protect the environment.
In the 1997-99 period many self-proclaimed economists claimed that the Phillips Curve was finally dead. Apparently, the “old macro rules” didn't work anymore, possibly because the “new economy” had arrived. Think about the third equation in the model..
Describe the impact of a payroll tax on wages and employment in a competitive industry. Why is part of the tax shifted to workers? What is the deadweight loss of the payroll tax?
A sports store puts designs 12 different designs on sweat shirts. Setup between each design takes an hour and costs $18,000. Once setup, at a cost of $8,000 they can produce 1,000 units. Does this production exhibit scale economies or scope economies..
Using an appropriate diagram, impact of the monopolist on the society's welfare
Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $4,250 as a result of increase in income from $40,000 to $45,000.
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