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1. Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. Its estimates that the marginal cost function for reducing pollution by installing additional capital equipment is: MC = 40P where P represent a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is MR = 1,000 - 10P. How much pollution reduction should Appalachian Coal Mining undertake?
2. Twenty first Century Electronics has discovered a theft problem at its warehouse and has decided to hire security guards. The firm wants to hire the optimal number of security guards. The following table shows how the number of security guards affects the number of radios stolen per week. If:
Number of Number ofsecurity guards stolen radios per week0 501 302 203 144 85 6
a. If each security guard is paid $200 a week and the cost of a stolen radio is $25, how many security guards should the firm hire?b. If the cost of the stolen radio is $25, what is the most the firm would be willing to pay to hire the first security guard?c. If each security guard is paid $200 a week and the cost of a stolen radio is $50, how many security guards should the firm hire?
In a closed economy, marginal propensity to consume .6. If the economy opens up to world and marginal propensity to import is .4, using the Keynesian model of output determination;
Explain how useful is this demand equation for forecasting demand for the pill slicer in the next five years
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Consider a product with a supply function Q 1 = β 0 + β 1 + u 1, a demand function Q d i =y 0 +u i d . Show that P i and u s d are correlated.
Describe whether capital generated in the industrialized countries is finding its way to the less-developed.
Assume that the soft coal industry is a competitive industry and it is in long run equilibrium. Now assume that the firms in the industry form a cartel.
Some nations have very different economies. In the absence of market-set prices, how are prices determined for household goods.
Illustrate what factors have contributed to increased income inequality an economy along with an equitable income distribution may be efficient as well.
Expalin how can inflation derail the economy from its growth path.
The Clark Corporation wants to expand. It is planning a cash purchase of Kent enterprises for $3 million. Kent has a $700,000 tax loss carryforard that could be used immediately
Compute and contrast at least two two-year forcasts from separate sources for two economic indicator.
Illustrate each of the following events using a demand and supply diagram for bananas.
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