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The COO notifies all plant managers in the company of a simplified bonus program. A plant manager's bonus will be tied to one measurement - average production cost. The lower a plant's average production cost, the higher the bonus. Is this type of bonus structure in the interest of the company? Use theoretical and graphical insights from chapter five of the textbook to explain your reasoning.
Problem based on Utility Function - Problem, Answer and explain the following using a diagram which is completely labeled.
Compute total revenue, marginal revenue, marginal cost, and average total cost of this natural monopoly. What is the profit maximizing output and price for this natural monopoly when the government does not regulate it?
Describe what effect an expansionary fiscal policy would've on the price level and real GDP starting from full employment equilibrium.
Bush proposed for government expenditures in the case of a recessionary gap? What is the effect of his policies on the federal government budget?
Characterize each of the following statements as true or false, and explain your answer.
From the regression output, estimate the demand function when income is $40,000 and price is $2 per gallon. Explain the result in terms of R-square, T-test, F-statistic, and signs of each X variables.
Compute the employment rate (i.e., number employed: population) in each year? How can employment rate may go up or down in the unemployment rate stays the same? How can employment rate go up if unemployment rate also goes up?
Why might it be difficult for the Fed to formally adopt inflation targeting? Would inflation targeting be a good policy for the Fed in the present economic environment
Vulnerability Analysis
Essay on Market imperfection associated with negative externalities
In light of Ricardian model, how might you measure the claim by developing countries that they're at a disadvantage in trade
What is the profit-maximizing price and output? What is the total profit? What is the price elasticity of demand at the profit maximizing output?
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