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In 2009, ABC Company made $2M of net profit and spent $100,000 on advertisement. In 2010, it made $2.5M of net profit and spent $150,000 of advertisement. Based on this information, if ABC's advertisement expenditure increases by $20,000 in 2011, how much do you expect its net profit to increase? Explain why the ratios of net profit to advertisement expenditure in 2009 and 2010 are different from the slope of the net profit advertisement relationship.
1. Consider the market for a particular type of computer memory chip. Would you expect the long-run (own-price) elasticity of supply to be larger or smaller than the short-run elas
What are the advantages of leaving resource allocation to price allocation? Ans) The 5 benefits are Neutral, Flexible, Freedom of choice, No administrative cost and lastly Dimin
Using an aggregate demand and supply diagram, explain how each of the following scenarios affects the equilibrium price level and aggregate output. Consider first the short-run, th
#questionKeynes liquidity Preference theory stipulates that money demand is negatively related to current income and positively related to interest rate..
A biologist working in the Outback of Australia is studying the effects of land-use by tourists (campers, fishers, etc.) on vegetation cover in a river gorge of the outback. There
The events X and Y are mutually exclusive. Suppose P(X)=.05 and P(Y) =.02. What is the probability of either X or Y occurring? What is not probability of X nor Y happens?
Q. How commercial banks create money? Commercial banks clearly can't influence the amount of currency in economy or monetary base because they aren't allowed to print money. Th
what is the impact of interest rate in consumption
Consider the following utility function: U = X 1 X 2 Where X 1 and X 2 are quantities consumed of two goods. You are considering the actions of a consumer that maxi
Incentives Incentives designed to increase effort, reward enterprise and encourage saving and investment include: an emphasis on the effect of a reduction in the margi
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