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An established firm is considering expanding its capacity to take advantage of a recent rapid growth in demand. It can do so in two ways. It can purchase fungible, general-purpose assets that can be resold close to their original value, if their use in the industry proves unprofitable. Or, it can invest in highly specialized assets that, once they are put in place, have no alternative uses and virtually no salvage value. Assuming that each choice results in the same production costs once installed, under what choice is the firm likely to encounter a greater likelihood that its competitors will also expand their capacities?
Think of ways in which the Government is actively involved with the purpose of changing the economy with regard to unemployment or inflation (or deflation). Do you agree that the Government ought to be involved? Why or why not?
What is the present value of costs under option A? Under option B? Which is the better option? (b)* Given that she is going to stay in business for another seven years, should she be considering other options??
Show that a monopolist always advertises too much when measured by the yardstick of the preadvertising tastes. Show that the result also holds when measured by the yardstick of postadvertising tastes.
Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. Carry unit costs to the nearest cent.
Explain the Mutiplier Effect. Try to explain it in some detail so that someone who did not know anything about economics would be able to gain a fundamental understanding of it. Use a visual aid to help the observer understand the concept.
Examine KANO Analysis of customer requirements also come up with some questions (also answers) concerning it.
Tom gains utility from consumption C and leisure L. The most leisure she can consume in any given week is 112 hours. His wage is $20. His utility function is U(C,L) = C^3/4*L^1/4. Tom receives 640 each week from her great-grandmother. What is the mar..
Both the buyers and sellers of good x, and the distribution of the benefits will be dependent on the elasticity of demand and the elasticity of supply.
Assume the farmer buys insurance that pays 3$ if it doesn't rain but costs 2$. Illustrate what is their consumption when it rains.
Illustrate what is the firm's profit maximizing output level. Is the industry in long-run equilibrium.
whenever the same efforts must be made to uncork also pour both bottles.
Ketchup is a complement (as well as a condiment) for hot dogs. If the price of ketchup decreases, using a supply and demand diagrams for hot dogs, show what happens to equilibrium price, equilibrium quantity for hot dogs, and total revenue for produc..
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