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Under the guidance of a good manager, a monopolistic ally competitive firm spends an optimal amount of its revenues on advertising. Last month the firm spent $2,500 of its 510,000 revenues on advertising. If its advertising elasticity was 0.5, what was this firm's price elasticity demand? Docs this make the firm's demand elastic, unit elastic or inelastic?
When the economy is regularly hit by TFP shocks we say the one-period model is useful because it realistically predicts that : Suppose that in the one-period model the government wants to maximize output and the time endowment is expressed in hours (..
In 2006 the CEO of Bear Sterns, James Caynes, received a compensation package of $34 million. The following year Bear Sterns cost $2.7 billion to the taxpayers. Angelo Mozilo and two other top executives were charged by the Security and Exchange Comm..
What will be the monthly payment on a 30-year, $250,000 mortgage loan, where the interest rate is 6% per year, compounded monthly? How much interest is paid over the life of the loan? What will be the monthly payment on a 30-year, $250,000 mortgage l..
What are required reserves? What are excess reserves? Explain how the Fed can affect the quantity of excess reserves in the banking system. Explain why an individual bank can increase the money supply by the amount of its excess reserves, whereas the..
A monopoly or oligopoly showing no economic profit or loss has
Identify an economic issue that both parties address and compare and contrast their views on that issue. Generally speaking, how much of the disagreement is based on normative economics compared to positive economics?
Vertical integration is relatively more attractive:
Wall Street Journal costs $206, payable now, for a two-year subscription. Newspaper is published 252 days per year. What is a subscriber's cost per copy of newspaper, taking interest into account.
If B accepts, the division is implemented. If B rejects, each player obtains their outside option. Assume that if a player is indifferent between a proposed dividsion and his or her outside option, then the player accepts the division.
Critically analyze the pros and cons of putting a price ceiling on prescription medicine. Make sure to use concepts from both chapters seen this unit such as government intervention, inefficiencies, price elasticity, etc. in your answer.
they have the same demand curve for computer services. Use a graph to illustrate the overall value of computing services to the consumer. What does this imply about the profit maximizing price HAL can charge for the computer hardware.
Gomez runs a small pottery firm. He hires one helper at $11,500 per year, pays annual rent of $7,000 for his shop, and spends $22,500 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) t..
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