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Suppose that a paper mill "feeds " a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit of boxes increases earnings by $10, the second $9, the third $8, and so on, until the tenth unit increases profit by just $1. The cost the upstream mill incurs for producing enough paper to make one unit of boxes is $3.50. a. if the two companies are separate profit centers, and the upstream paper mill sets a single transfer price (the price the box company pays the paper mill), what price will it set, and how much money will the company make b. if the paper mill were forced to transfer at marginal cost, how much money would the company make?
Suppose Nigeria has 20 million workers and 16 million units of capital, while Botswana has 5 million workers and 3.5 million units of capital. Which of the following statements is
A person chooses between leisure and consumption. All of their consumption comes from current income. The utility derived from any combination of leisure and consumption is given b
A critically important criterion that must be considered in evaluating environmental policies is whether they provide strong incentives for people to find new ways to improve ambie
Assume the residents of an economy spend all of their income on cauliflower, broccoli and carrots. In 2003 they buy100 heads of cauliflowers for Rs. 200; 50 bunch of broccoli f
what is the importance of the quantity theory of money
WHO IS JOHN MANYARD KEYNES
Fiscal Policy An Increase in Government Spending: Figure 1 Let us examine how an increase in government spending affects the interest rate and the level of income.
Institutional Setting for Trade Policy Formulation: While the Ministry of Commerce has the main responsibility of formulating India's trade policy, it also seeks policy inputs
using a graph of the classical labour market, illustrate the effects of a real wage existing in the market that is lower than the equilibruim real wage.what will eventually happen
How does Opportunity cost and production possibilities relate?
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