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Given your demand and cost estimates, what price should you charge if you want to maximize your weekly profit? What output should you produce?
We have a theory to explain the equilibrium price and output for monopoly. How can game theory help us understand the decisions made by oligopolists?
What impact do lower transportation costs have on the market power of individual producers? Do you think the U.S. economy is more or less competitive today?
Why are real wages in the United States higher than in other countries? Is the labor force itself responsible for the higher wages of American workers? Explain.
Discuss why do some people earn higher wages than others? Why are wages in some occupations higher than in others?
If you use the notion of derived demand, what impact would a boycott on sugar have on the wages of the farm laborers in the short run? In the long run?
What impact will a highly elastic demand for a product have on the elasticity of demand for the resources used to produce the product? Explain.
Discuss how low would the Mexican wage have to be for the firm to reduce its wage cost per unit of output by moving to Mexico?
The last unit of capital hired (rented) cost $500 per month and increased output by 80 dresses. Is the dressmaker minimizing costs?
Suppose that a security guard would completely eliminate the shoplifting in your store.
Make sure that your solution is grounded in economic reality and is in compliance with Title VII.
If foreigners have confidence in the U.S. economy and therefore move to expand their investments. How will the exchange rate value of the dollar be affected?
What impact would this have on interest rates, the inflow of capital, the current-account deficit, and the foreign exchange value of the dollar?
In contrast, Carole likes both foods and can hardly tell the difference between the two. Discuss who will have the more elastic demand for yogurt?
How does this method of payment affect consumption levels of medical services? Might method of organization result in too much consumption of medical services?
What are the major determinants of a product's price elasticity of demand? Studies indicate that the demand for Florida oranges, Bayer aspirin and watermelons.
Why do these data provide us with two points on the average household's demand curve for residential electricity in this region? Why or why not?
Is this consumer maximizing his utility? Would you suggest that he buy more jeans and fewer T-shirts, or more T-shirts and fewer jeans?
How can the income and substitution effects of a price change help explain this finding?
If the true price elasticity were - 1.2, what would you suggest the university do to expand revenue?
These purchases increase the exchange rate value of the dollar relative to the Japanese yen and Chinese yuan. Are these purchases harmful to the US economy?
Explain the factors that cause a firm's short-run average total costs initially to decline, but eventually to increase, as the rate of output rises.
Discuss what is the principal-agent problem? When will the principal-agent problem be most severe?
Will the firm's accounting statement reflect the opportunity cost of the bicycles? Why or why not? What costs would an accounting statement reveal?
What is economic profit? How might it differ from accounting profit? Explain why firms that are making zero economic profit are likely to continue in business.