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A firm is facing the following input prices: wage rate = $8/hour and price of capital = $16. At the current input mix MPL = 24 and MPK = 32. Should the firm change its input mix? Why?
Explain the principles of microeconomics apply to other country. Describe any differences or special situations.
Proponents of free market systems argue that free enterprise leads to more efficient production and better response to changing consumer preferences. Others point to the fact that markets are not perfect.
Illustrate role do property rights play in creating common property resources? Why are common property resources subject to market failure due to nonexcludability.
Explain how do you calculate the free market wage rate given the labor supply and demand functions.
If the cost advantage of interest rate swaps would likely be arbitraged away in competitive markets, what other explanations exist to explain the rapid development of the interest rate swap market?
Are there any other advantages of using a substitution vs. elimination method. Can you think of any real life examples where you HAVE to use one method and where you CANNOT use a particular method?
For a developing country to grow, it needs capital. The major source of capital in most countries is domestic saving, but the goal of stimulating domestic saving usually is in conflict with government policies aimed at reducing inequality
Suppose demand for the firms watches falls permanently to P = 20 - Q/20,000. In view of this fall in demand, what output should the firm produce in the short run? In the long run? Explain.
Assume her estimated selling price is lower than originally projected. How much revenue would she need in order to earn a positive accounting profits.
Elasticity shows the responsiveness of supply or demand to changes in price. What are the factors exerting influence on price elasticities of supply and demand
The variable rdintens is expenditures on research and development (R&D) as a percentage of sales. Sales are measured in millions of dollars. The variable profmarg is profits as a percentage of sales. Using the data in RDCHEM.RAW for 32 firms in the..
If output is produced according to Q = 5Lk (L is the quantity of labor and k is the quantity of capital), the price of K is $12, and the price of L is $6, then the cost minimizing combination of K and L capable of producing 4,000 units of output i..
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