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Most restaurant customers tip according to a percentage rule - between 15 and 25 percent of the bill. Diners who have dinner and a $20 bottle of wine usually pay the same percentage of the bottle price as diners who order a $100 bottle. Why, when the same efforts must be made to uncork and pour both bottles?
calculate the exact elasticity of demand in the following examples: Then tell if, in each case, demand is elastic, inelastic, or unitary elastic. (a) When the price of a deluxe car wash rises from $10.00 to $11.00, the number of daily customers fa..
Enumerate the various objectives a firm might have and how the price mechanism can be used to realize such goals. While you're at it, calculate the price and quantity to: (a) Maximize TR (b) Maximize total profit
For the same loan described under Q1, the individual decides that instead of selling the house after the 71st payment, to keep it and shorten the pay off period by increasing the montly payment by $150 each month. What is the number of months re..
A 1 year US treasury bond yields 0.5% (0.005 as a decimal), and the 1-year euro bond rate is 1.0%. If the current spot rate is € .7565/ $ , and the current 1-year forward rate is €.7465, then which investment offers the highest return
a road between fairbanks and Nome, alaska, will have a most likely construction of $4 million per mile. Doubling this cost is considered to have a probability of 30%, and cutting it by 25% is considered to have a probability of 10%. the states int..
A firm is considering moving its manufacturing plant from Chicago to a new location. The industrial engineering department was asked to identify the various alternatives together with the costs to relocate the plant, and the benefits.
What is the probability that the annual return in a given year will exceed 15%? Suppose that the fund managers change the holdings of the fund such that the mean becomes 15% and the standard deviation becomes 5%. What are the new values for the pre..
Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all thre..
Billy Penny is trying to determine how many units of two types of lawn mowers to produce each day. One of these is the Standard model, while the other is the Deluxe model. The profit per unit on the Standard model is $60, while the profit per unit..
If software can only be produced in the quantities above, what should be the production level if the producer operates in a monopolistic competitive market where the price of software at each possible quantity is also listed above
In March of year 0, Molly begins building a barn that she will use for a horse stable business. This barn costs $43,000 plus $7,000 for earthwork to make it usable, and is placed into service in May of year 0. She also buys a tractor for this busines..
Assume that $5000 is deposited today, three years from now, six years from now, nine years from now, and twelve years from now in a savings account which earns 5% annual interest. What is the balance at the end of year 13
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