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According to the rule for optimal input usage, a firm should hire a person as long as her marginal revenue product is greater than her marginal cost to the company. It is well known that many companies have management training programs in which new trainees are paid relatively high starting salaries and arenot expected to make substantial contributions to the company until after the program is over (programs may run between 6 to 18 months).
In offering such training programs, is a company violating the optimality rule? Explain in detail.
The Licorice industry is competitive. Each firm produces 2 million strings of licorice per year. The strings have an average total cost of .20 cents each and they sell for .30 cents.
The federal government estimated that the elasticity of demand for cigarettes among teenagers is equal to 2. If they want to reduce smoking by 50% among this group and the price of cigarettes is $6.00 per pack,
what are the real after-tax costs of funds to the business? Similarly, if an investor receives a nominal return of 8 percent on a savings deposit, the tax rate is 30 percent, and the inflation rate is 6 percent, what is the after-tax rate of retur..
Assume velocity is constant, real income is constant at Y ¯= 200 and that the demand for real money balances is given by: L(i, Y ) =Y/√i (9) (a) If expected inflation is zero, the nominal interest rateis i = 0.25 and the price level..
"We should impose a 20 percent luxury tax on expensive automobiles (those with a sales price of $50,000 or more) in order to collect more tax revenue from the wealthy." Will the burden of the proposed tax fall primarily on the wealthy Why or why n..
Derive the solution to this problem. How do the criteria differ? Use the SVD of the Lj to simplify the comparison of the two approaches.
what you think were the factors behind such fluctuations
When the nation is large enough to affect relative commodity prices?
Should Airway Express continue to provide the flight between Los Angeles and New York at all. If Airway Express decides not to fly, it still has to pay the fixed costs of $3,000 per day. The evening with the return flight the next afternoon is cou..
How many inspectors should be hired if additional indirect cost (lost goodwill and so on) were to average 30 percent of direct replacement or repair costs?
You deposit today $1500 in an account that pays 1.7% per year. For the next few years you will keep making deposits 8.4% larger than the previous one. What will be the balance on the account after 6 deposits
1. suppose there is an increase in supply rightward shift in supply. consider two graphs. in graph x demand is
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