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"A profit maximizing firm in a perfectly competitive market where all firms are identical has an incentive to lower its price below the market clearing price". If the statement is true, explain why. If it is false, explain your reasoning
What would happen if sellers must begin paying a tax on some good that has perfectly elastic demand but only somewhat elastic supply?
A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces no fixed cost. How much will the firm produce? Can yo..
Suppose that you borrowed $25,000 from a bank at a monthly interest rate of 2% compounded monthly to purchase a car. This loan is to be repaid in 24 equal monthly installments over two years. How much is the monthly installment? What would be the mon..
What are the fiscal policy instruments? What are the fiscal policy types? Currently the economy is facing an inflationary gap and the government is extremelyconcerned with the rapidly raising prices.
Which of the following is true about business cycles in the United States?
Use the Mundell-Fleming model to try to understand the basis for this criticism and show a possible policy that Germany might pursue that could have a beneficial impact on another member country of the euro zone. how do the equation(s) of the model (..
A legal minimum wage does all but which ONE of the following? a) Reduces the quantity of labor demanded b) Increases the quantity of labor supplied c) Creates a market surplus of labor d) Creates a market shortage of labor
In the 1920’s, General Motors purchased its auto bodies from an independent firm, Fisher Body. GM decided to build a new plant and, in order to improve the reliability of supply and also to decrease shipping costs, GM asked Fisher Body to build a new..
Petra likes iPhone apps and epresso pods for her coffee machine. We denote the number of apps by X and pods by Y. Prices PX = 10. PY = 5. Her income in the period is 500. Her utility function is given by: (1) U(X,Y) = X^(0.4)Y^(0.6). What must her ne..
The price index in the first year is 125, in the second year is 150, and in the third year is 200. What is the inflation rate between the first and second year and between the second and third year?
Evaluate the financial performance of the company using the information provided in the scenario. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term and how each factor influences manager..
Whenever a partnership agreement is silent on this allocation of profits and losses, profit and losses are divided in the same proportion as capital contributions. Whenever a partnership agreement allocated losses in unequal proportions, but is silen..
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