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Recently, the owner of a Trader Joe's franchise decided to change how she compensated her top manager. Last year, she paid him a fixed salary of $65,000, and her store made $120,000 in profits (not counting payment to her top manager). She suspected the store could do much better and feared the fixed salary was causing her top manager to shirk on the job. Therefore, this year she decided to offer him a fixed salary of $30,000 plus 15% of the store's profits. Since the change, the store is performing much better, and she forecasts profits this year to be $280,000 (again, not counting the payment to her top manager). Assuming the change in compensation is the reason for the increased profits, and that the forecast is accurate, how much more money will the owner make (net of payment to her top manager) because of this change?
Chez Henri is a restaurant chain that operates in forty different cities. It employed an economist to determine the factors affecting the demand for its sales.
Recall from introductory economics that an raise of $1 in government spending may raise GDP through more than $1. The exact value by which GDP goes up is multiplier.
Identify whether the variables in your model suffer from non-stationarity. Discuss the possible implication of non-stationarity for your model and how this problem could be addressed.
Tom can produce 40 balls per hour or 4 bats per hour. Tessa can produce 80 balls per hour or 4 bats per hour. a. calculate Tom's opportunity cost of producing a ball. b. calculate Tessa's opportunity cost of producing a ball.
Suppose you have been employed as an economic analyst, your job is to use the Regression Model to estimate potential sales of your employer's product.
Laura desired to make a multiple regression model based on advertising expenditures and coffee times price index. Based on her selection of all normal values she obtained the following:
There is a big gap in the earnings of married women and married men, even if individuals of both sex have the same level of education.
In January of 2007 Mary bought 100 stocks of Apple Inc for $55 each. this stock paid an average dividend of $4.50 per stock until the end of each year until mary sold all the stocks in December 2012 for $75.50 each. What is the effective interes..
In order to have money available for replacing their family vehicle, a couple planned to have $220,000 available in 10 years by investing. If they plan to increase their savings by 10% each year, how much must they invest in year 1 if they expect ..
Despite very low growth of GDP in 2008 and 2009, and still high unemployment rate of 9.5 percent in June 2010.
Determine what should you do to maximize benefits with respect to values after you acquire a substitute product. Which values should you change more?
In the derivation of the Solow growth model, we assumed that government spending and taxes less transfers were both zero. Relax that assumption and assume that both are constant graction of GDP, say T = G = gammaY. What is the steady state level o..
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