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What are some reasons why the investment strategy of a 30-year-old might differ from the investment strategy of a 65-year-old?
but you needed a surge of financial capital to carry out a major expansion, would you prefer to raise the funds through borrowing or by issuing stock?
Why are bonds somewhat risky to buy, even though they make predetermined payments based on a fixed rate of interest?
What quantities of root beer and CDs does Marc buy? What is his marginal rate of substitution of CDs for root beer at the point at which he consumes?
Explain how the rising price of grain affects the average total cost and marginal cost of producing breakfast cereals.
At what output is Yolanda's average total cost at a minimum? Construct Yolanda's total variable cost and total cost schedules.
Sonya used to earn $25,000 a year selling real estate, but she now sells greeting cards. Calculate Sonya's explicit costs, implicit costs, and economic profit.
Which store has the lower total cost? How can you be sure? Which has the lower marginal cost? How can you be sure? Sketch each firm's marginal cost curve.
explain why Gap is reducing the size of its stores. Is Gap making a long-run decision or a short-run decision? Is Gap taking advantage of economies of scale?
Calculate Joe's annual explicit costs, implicit costs, and economic profit from his shoe shine business.
Lee's accountant recorded the depreciation on Lee's cottage during 2011 as $7,000. What did the accountant say Lee's profit or loss was?
Explain what might be the performance for each of your portfolios at the end of the year.
Explain what happens in an economy when the financial markets limit access to capital. How does this affect economic growth and employment?
Explain why a financial investor in stocks cannot earn high capital gains simply by buying companies with a demonstrated record of high profits.
Why do very small companies tend to raise money from private investors instead of through an IPO?
What is Laurence Kotlikoff's proposal for fixing health care in the United States? Draw a graph to illustrate how his proposal would work.
What is the cost of health care in the United States compared to that in Canada and major European countries?
What are the key economic problems in providing an efficient quantity and distribution of health-care insurance and service?
Provide an example of private information that a baseball player who wants a no-trade clause possesses.
Describe the moral hazard and adverse selection problems in these two leagues. Which league best addresses these problems?
What asymmetric information problems is Zaneb likley to enounter and what arrangements are likely to help cope with those problems? Explain your answers.
Describe the used-car market in the United States. How many used cars get traded per year and at what average price?
How would the health-care system you've described compare with that in the United States today? How would it compare to that in Canada?
Why would you buy collision insurance? If the insurance company offers you a large deductible or a no-claim bonus are you likely to take the offer?
Why is there an adverse selection problem in a transaction between Mary and an insurance company? Explain why or why not?