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Assume I sell rubber garden hoses. I sell my hoses for $10 each and expect to sell 100,000/year for the next three years. My fixed costs are $185,000 and my variable costs are expected to be $650,00
Sometimes market activities (production, buying, and selling) have unintended positive or negative effects outside the market's scope. These are called externalities. As a policy maker concerned wit
Suppose that Frank is considering giving Mike eight paper back books in exchange for 2 CDs. Explain the conditions under which this trade would be mutually beneficial. Also explain the conditions un
Discuss why the government would implement a program to lower the price of a good and the welfare effects of such a program. Give an example of good for which such a policy has been implemented and
Special equipment can be designed and built for $80,000. This equipment will have a salvage value of $70,000 in year 1, which will decrease b y $10,000 through year 8. Operation and maintenance cost
5 countries are USA, Japan, Sweden, Trinidad and Tobago, and Botswana Go to CIA world factbook, click on guide to country comparisons, economy and GDP per capita Which country has the highest and lowe
Assume the current prices in the market are challenged by the regulatory agency, resulting in a new maximum price of $2,000. How will this change the industry output and market share for each compan
Joe, the owner of Super Taco, has historical sales info from recent price changes. Joe is certain no other demand factors, such as compeitor prices or consumer income, have significantly changed.
CHEMCO operates two plants, A and B, which produce the same product. The capacity of Plant A is 60,000 gallons while that of plant B is 80,000 gallons. The annual fixed cost of Plant A is $2,600,000
The country of Benin both grows and imports rice. If the government of Benin wants their rice farmers to earn more for their rice than the world price but does not want its consumers to pay more for
Each morning, the Roach Coach Express departs on it delivery rounds, bringing needed donuts, hot coffee and similar nourishment to corporate clients at various locations around Colorado Springs. Ass
Assume rubber hoses will be outlawed in 3 years due to water scarcity and watering regulations. My rate of interest on borrowed funds is 7.5%. What's the cash value of the firm if I want to sell it
Two key elements that affect demand are the season (Xmas and Summer are best times) and timing of other film releases. Both Studio Roxie and Midnight Flicks are producing action movies. The 2 studio
You just bought a bagel shop. A market study shows your customers are willing to pay for a bagel into 9 equal-sized groups: ($3.00, $2.75, $2.50, $2.25, $2.00, $1.75, $1.50, $1.25, $1.00).
Mark owns ABC Karate . He has a 2-yr lease and those monthly payments are fixed over that time period. Mark wants to increase his revenues and is trying to decide to raise or lower the monthly fees
The situation is the same as in 1, except that the extraction costs per liter are different every period and now they given by; c1=$10, c2=$20 and c3=$200. What are the optimal extraction plan and t
For either route, the volume of traffic will be 400,000 cars per year. These cars are assumed to operate at $0.25 per mile. Assuming a 40-year life for each road and an interest rate of 10%, determi
Assume that the government at Home decided to use the import tariff of $100. Calculate the new world price, the new imported quantity and the tariff revenues collected by the government.
industry demand curve equals Q=900-100P and the long run average cost is a constant $1.50 per unit of output. Calculate market output, price, consumer surplus, and producer surplus in a competitive
Assume that Home is a small economy, and the world price is given by $60. If the Home's government wants to collect tariff revenues and uses the import tariff of $100, what is the imported quantity,
As head of the planning division of Eastern Motors, your job is to determine where to locate a new plant. The only inputs used in your cars are steel and labor and the production function is Cobb{Do
Country A is a very large and advanced economy, whereas country B is newly industrialized country, which tourists appreciate a lot for its warm climate and great Mexican food.The government of count
will all the value end up going to customers, or will companies be able to reap a share of it will the internet bolster or erode the ability of companies to gain sustainable advantages over their co
A firm has a production function Q=F (K, L) with constant returns to scale. Input prices are r=$2/ K-unit and w=$1/L-unit. The output expansion path for this production function at these input price
A firm purchases capital and labour in compeitive markets at prices of r= $6/machine-hour and w=$4/ labour-hours, respectively. With the firm's current input mix, the marginal prodcut of capital is