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Floyd is now working in a job that pays $18,000 per year. He is contemplating a one-year automobile mechanics course that costs $1,000 for books and tuition. Floyd estimates that the course will increase his income to $23,000 in each of the three years following completion of the course. At the end of those three years, Floyd plans to retire to a commune in Boulder, Colorado. The current interest rate is 10 percent. Is it economically rational for Floyd to enroll in the course?
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If Sean's Fire Engines were a competitive firm instead and $125,000 were the market price for an engine, decreasing its price from $125,000 to $75,000 would result in an increase in production quantity and total revenue.
On the below case study about the Price Discrimination strategies implemented by Sam's Club, CVS and others. Explain briefly how this is an improvement over the generic use of coupons as a means to price discriminate. Are Sam's Club, CVS and others m..
Suppose that individuals view their loss of income from imposing a single marginal tax rate as offset by the benefits of public services purchased with the revenues so that the (representative) individual is just as well off as before. How are their ..
Spacely Sprockets' short-run cost curve is: C(q, K) = + 15K, where q is the number of Sprockets produced and K is the number of robot hours Spacely hires.
The decline in the value of the dollar from 1985 to 1988 was beneficial to. Which of the following will increase interest rates in the short run? The concept of "lender of last resort" is that when. The Federal Reserve System was established.
Assume that yesterday the exchange rate between the euro and the Australian dollar was 1 euro = 0.6 Singaporean dollars. Assume that today the euro is trading at 1 euro = 0.70 Australian dollars. what domestic open-market operation can the Australian..
Which of the following is NOT a characteristic of a perfectly competitive market? Recall the Application called "Wireless Women in Pakistan." What makes the wireless telephone market in the US NOT perfectly competitive? Recall the Application called ..
If firms in a monopolistically competitive market are incurring economic losses, which of the following scenarios would best reflect the change facing incumbent firms (who are able to stay in the market) as the market adjusts to its new equilibriu..
What is meant by an open market purchase? It is the purchase of goods and services by the federal government in open markets. Even though this does not happen often, if the Fed reduces the required reserve ratio, the supply of money will increase. Wh..
The number of land lines for tellephones is rapidly declining as more and more people use smartphones. Using the markets for land lines and smartphones, illustrate these changes. What is causing them?
There are pros and cons if policymakers use monetary and fiscal policy to stabilize the economy. Explain the main arguments in favor of economic stabilization. Explain why policy lags could make stabilization policies counterproductive.
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