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Two firms constitute the entire doghouse industry. One has the long-run cost function c1(y) = 3 + (4y^2)/3 for y > 0 and c1(0) = 0, and the other has the long-run cost function c2(y) = 10 + (y^2)/10 for y > 0 and c2(0) = 0. If no new firms can enter the industry, show that at price p = 3 only one firm will operate.
Suppose the government decides to raise the gasoline tax as a way of reducing air pollution and traffic congestion to their optimal levels. Which of the following describes why Pigovian taxes, such as gasoline tax, are unlike most other taxes?
A hospital bought digital imaging equipment annual payments of $243,000 per year over 8 years. if the interest rate is 13% what will the total amount paid for the equipment be at the end of the eighth year?
A high pressure pump at a methan gas (bio fuel) plant in memphis costs $30000 for installation and has an estimated life of 12 years. By the addition of a specialized piece of auxiliary equipment, an annual savings of $500 in operating expense for th..
Explain how do economists distinguish between the absolute and relative sizes of the public debt. Why is the distinction important.
Certainly there is a market for violent gaming, but I wonder if there is an ethical line that companies chose not to cross. For example, there are presently several games on the market that allow players to rape women. And then there is the issue of ..
If the rate of money growth and the growth rate of the real GDP were the same in both countries, the explain how would the rate of inflation differ among them.
A colleague tells you that he can get a business loan from the bank, but the rates seem very high for what your colleague considers a low-risk loan. Give an adverse election explanation for this and offer advice to your friend on how to solve the pro..
Several organizations and individuals – usually advocates of a balanced budget – maintain National Debt Clock. Is national debt a worry for the economy? Economists do not agree on the answer to this question. How did the 1974 Congressional Budget Act..
The profitability of a bank depends on several different factors. Banks manage their assets in a variety of ways. Explain the importance of “liquidity management”? What is the concern of the bank in regard to the liquidity of its assets? Bank Manage..
Construct a numerical example to show that the exclusion of municipal bond interest from income taxation is equivalent to a government subsidy of state and local capital spending. Assume you believe that income is a good proxy for ability to pay. Wha..
Your firm is considering a potential investment project, and your finance group has prepared the following estimates: and NPV of $10 million if the economy is strong (30% probablility), and NPV of $4 million if the economy is normal (50% probablility..
Suppose that the price of the firm’s product is $20. What are the firm’s marginal and average revenue product functions? What is the firm’s short-run demand function for input Z.
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