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You are the owner of a local Honda dealership. Unlike other dealerships in the area, you take pride in your “No Haggle” sales policy. Last year, your dealership earned record profits of $1.5 million. In your market, you compete against two other dealers, and the market-level price elasticity of demand for midsized Honda automobiles is -1.6. In each of the last five years, your dealership has sold more midsized automobiles than any other Honda dealership in the nation. This entitled your dealership to an additional 25 percent off the manufacturer’s suggested retail price (MSRP) in each year. Taking this into account, your marginal cost of a midsized automobile is $12,000. What price should you charge for a midsized automobile if you expect to maintain your record sales?
What is the difference between contractionary and expansionary monetary policy? What is the intention of each policy under a depression, recession, or robust economy? Which type of monetary policy is more appropriate today and why?
The recent recession seems to be ending, the number of people with jobs is expanding, and it appears that wage levels are beginning to increase. Against that background, assume that you own a perfectly competitive company that makes a popular line of..
q.consolidated salt company sells table salt to both retail grocery chains and commercial users e.g. bakeries snack
Discusses an example of a regulatory measure which was supposed to serve public interest, but in reality serves private interest.
If you had $ 4000 now and invested it at 6% simple interest, how much would it be worth 12 years from now? How much would it be worth if you receive 5% compound interest instead of 6% simple interest?
What does the airline pilot’s supply curve in the Case in Point on how she has dealt with wage cutbacks look like? Does the substitution effect or the income effect dominate? How do you know?
Calculate the (1) unemployment rate, (2) labor force participation rate, (3) adult population and (4) the total population for the small town with the following statistics: employed = 1,000, labor force = 1,400, Not in the Labor Force = 1,000 and min..
A) in finding the optimal basket for a consumer we assume The preferences are exogenously given (we know the indifference map for this consumer) what can change the preferences and why? What would be the effect of change in preferences on a consumers..
Suppose that the government and central bank together want to keep GDP of a closed economy constant but raise the level of investment. What policies can they follow to achieve this?
Suppose at Columbia University, grade point average (GPA) and SAT scores are related by the conditional expectation
In 1980, per capita GDP of Rwanda was about $728 and in 2010 about $1,025. Calculate the average per capita GDP growth rate of Rwanda from 1980 to 2010.
Suppose that Lorena consumes only three different goods: steak knives, butter knives, and butcher knives. If, according to Lorena’s preferences, butter and butcher knives are inferior god, must steak knives be a normal good?
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