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Using demand and cost curves, draw a diagram depicting the firm's profit-maximizing price and output level.
When you find such a story, check back over the next few days. Did other airlines match the leader, or was the leader forced to back off its price changes?
The professor speaks with each student separately and offers the following deal: Sign a statement admitting to cheating. Which outcome do you expect? Why?
Use a cost-and-revenue graph to illustrate and explain the short-run profits in the video rental business.
Why might a price-leadership model of oligopoly not be an effective means of collusion in an oligopoly?
(Optimal Use of More Than One Resource) Explain the rule for determining optimal resource use when a firm employs more than one resource.
Many countries are predominantly agricultural. How does the law of diminishing marginal returns affect a firm's demand for labor?
Explain why the market supply curve of a resource slopes upward. Distinguish between how market reacts to a temporary difference in prices for same resource.
Which economic decision makers determine the supply of labor? What is their goal and what decision criteria do they use in trying to reach that goal?
Draw a world demand curve for bananas. A cartel, OBEC, Organization of Banana Exporting Countries, is founded in attempt to drive up the world price of bananas.
Identify the price curve would set and the quantity it would choose to Identify the price it faces and the quantity it would choose to produce.
Draw a downward-sloping demand curve and the corresponding marginal revenue curve for a monopolistically competitive firm.
Read the Wall Street Journal and look for articles that discuss firms. Describe the actions of a firm that has been successful. Was advertising important?
Analyze what would the supply of labor curve look like over this range of wages? Why?
Explain the concept of the net utility of work. How is it useful in developing the labor supply curve?
Use the diagram to illustrate the economic rent earned by workers who would fish at wage rates below the market equilibrium by shading in the appropriate area.
How students would be willing to sacrifice more hours of summer leisure the higher the wage rate. Identify the market equilibrium wage and hours of labor.
Why did labor supply, labor demand, or both change? Was only a single labor market affected, or were the effects felt in several markets simultaneously?
Suppose the market price of output is $25 per unit. What is the maximum weekly wage at which the firm would hire that additional worker?
Draw a line to represent fixed costs. Then draw in curves to represent variable cost and total cost.
Charles Cobbler, who continues to make fine shoes, faces typical short-run cost curves. Draw a curve that would represent marginal cost of production for firm.
Pick one and see if you can determine how it might affect a firm's cost curves. Will it cause one resource to be substituted for another?
How does having a menu that is uniform around the country provide McDonald's. How is menu planning made more complex by expanding into other countries?
(Perfect Competition and Efficiency) Define productive efficiency and allocative efficiency. What conditions must be met to achieve them?
Why does the long-run industry supply curve for an increasing-cost industry slope upward? What causes the increasing costs in an increasingcost industry?