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A recent McKinsey report concluded that 'If a price war occurs in a specific market, it is usually the result of mismanagement, seldom planned and very costly'. Do you agree or disagree with this statement? Critically examine this statement.
What is the income elasticity? Interpret the elasticity in a mathematic and economic context -- what does this number tell you? Is the own price elasticity consistent with economic principles? Explain.
Consider a firm selling two different products at two different plants. The cost function for both plants is given by C (q 1 , q 2 ) = q 1 2 + αq 1 q 2 + q 2 2 .
Suppose the slope of the consumption function is 0.75 and there was an increase in income of $100. Calculate the increase in consumption.
Question based on Laffer Curve : Tax Rate and Tax Revenue, Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?
A tariff is simply a tax on imports. Use our model of the excise tax (with diagram) to describe why domestic firms request that tariffs be imposed.
List and explain the sources of expenditures in economy by focusing on the 4 major sectors of economy.
Leisure-Time boats is a manufacturer of mid-to-high end boats with 12 sales territories throughout the U.S. Sales are generated by salespeople in each territory who develop relationships with boating distributors and related retailers.
Explain why you would be more or less willing to buy a share of Apple Computers stock in the following situations:
Give the utility function U(x, y) = (x-4) 1/2 (y-2)- 1/2 , what is the minimum income needed to ensure positive utility?
You are the manager of 3D Designs-a large company that does graphics work for Disney and other companies. You and your only competitor are contemplating the purchase of a new 3-D imaging device.
Suppose that the car manufacturer allows the car dealer to return all unsold cars at the end of a recessionary year. What is the car dealer's profit in a growth year and in a recession? What is their expected profit?
What is the equilibrium level of income? Compute disposable income, consumption and aggregate demand.
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