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The Taste Freeze Ice Cream Company is a perfectly competitive firm producing where MR = MC. The current market price of an ice cream sandwich is $5.00. Taste Freeze sells 200 ice cream sandwiches. Its AVC is $4.00 and its AFC is $3.00. What should Taste Freeze do? A. Continue to produce because price exceeds AVC B. Shut down production so that AVC will decrease C. Increase down and produce zero sandwiches because price is less than ATC D. Decrease production so that AFC will decrease
Suppose there is a technological change that allows manufacturers to make cell phones much more cheaply; in fact the price falls by 25%. If the short run price elasticity of demand is -0.8, how much does price change? Are cell phone producers better ..
Differentiate the followings; Gross Domestic Product (GDP) Vs Gross National Product (GNP), Net National Product (NNP) Vs National Income (NI), Real GDP Vs Nominal GDP, Real Wages Vs Nominal Wages.
Assume that capital is perfectly mobile, the price level is fixed, and the exchange rate is flexible. Now let the government increase purchases. Explain first why the equilibrium levels of output and the interest rate are unaffected. Then show whethe..
A change in the discount rate shifts the supply of reserves. Friedman's theory of money demand is more complex than Keynes's.
propose to model his tastes in the following way: For any 2 bundles A and B of "grams of cocaine" and "dollars of other consumption.
You buy a bond for $1118 that pays $20 interest ever 6 months. It will reach maturity in 9 years at which time it will return its face value of 1000 plus the final $20 interest payment. What is the pre-tax annual rate of return on this bond? Estimate..
A manufacturer requires an additional 10,000 square feet (929 square meters) of warehouse space. A reinforced-concrete building added to the existing main structure will cost $850,000, whereas the same amount of space can be constructed with a galvan..
Write a 1- to 2-page paper identifying the various parts of your chosen country’s Political Economy. Explain how this system developed over time and any changes you may foresee for the near future. Cite resources as appropriate to support your commen..
"Exotic" mortgages became popular in part because they allow someone of:
A deposit of $800 is planned for the end of each year into an account paying 8 percent/year compounded annually. The deposits were not made for the tenth and eleventh years. All other deposits were made as planned. What amount will be in the account ..
As the price of margarine rises by 20%, a manufacturer of baked goods increases its quantity of butter demanded by 5%. Calculate the cross-price elasticity of demand between butter and margarine. Are butter and margarine substitutes or complements fo..
When you retire, you will combine your money into an account with a 9 percent return. How much can you withdraw each month from your account assuming a 25-year withdrawal period.
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