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Set up a representative firm's profit-maximization problem. Write down the first-order conditions regarding the choices of L and D.
F(L) = min{0, L - 2}, where L represents the number of hours of labor employed. The wage rate is $15 an hour. What is their short-run cost function?
The relative price rule is equivalent to saying the marginal utility per dollar is the same for both goods, or goods should be consumed in the same ration as their relative price?
National Hospital is the only employer of nurses in the country of Castoria, and it acts as a profit maximizing monopsonist in the market for nursing labor. What is the deadweight loss arising from
However, sales in joint facilities are 20% lower than sales in two separate facilities. What do these numbers imply for the decision of when to open a shared facility versus two separate facilities?
What type of agency problem is involved here? Why would a chain such as Marriott tend to own its hotels in resort areas, such as national parks, where there is little repeat business.
It purchases protection from Himmel bank using a 3yr credit default swap at a quoted rate of 500bp. Briefly explain, with the aid of a flow chart, how the swap would work and what the possible cash
If the risk-free rate is 1% and the overall equity market risk premium is 10%. What price was a Best Bank share trade at in an efficient market?
choose any quantity to produce, and they make their quantity choices simultaneously. show how to derive the Cournot-Nash equilibrium to this game. What are firms' profit in equilibrium?
Process that will reduce the cost of producing Scruffs by $5 per unit can expect to receive by licensing her invention to the firms in the industry?
Explain exactly what the government actually did and why this merger is not occurring. Insight as to how mergers make sense from the corporate viewpoint. Then consider how a regulator must balance pub
Show the effect of an increase in unemployment benefit on the position of AD and AS curves in the short run and in the medium run.
Plot the aggregate expenditure and aggregate supply curves for incomes ranging from 500 to 3,000.Calculate the equilibrium level of income. What is the level of consumption at the equilibrium level of
Plot an aggregate expenditure and aggregate supply curves for incomes ranging from 500 to 3000 (b) calculate the equilibrium level of income.
What is your profit? What is your return on assets (ROA)? What is your return on equity (ROE)? Suppose that one of your borrowers defaults and you have to write off $25mn from the value of your loan
What is the money multiplier? How would deposits change if reserves increased by $2bn by helicopter drop? How much would net worth change? Do overall assets change by the same amount as liabilities?
Suppose firms compete in quantities. How much does each firm sell in a Cournot equilibrium? What is the market price and what are firms' profit?
Firm 1 has a unit cost of production c1 equal to 6 whereas firm 2 has a higher unit cost of production c2 equal to 10. what is the Bertrand-Nash equilibrium outcome?
"Suppose that for the quadratic total cost function in the preceding problem, a=100, b=6, and c=1. At what output level is average total cost minimized?
Assuming that the market for music CDs is monopolistically competitive, which model do you think is more appropriate for analysis of that market: the representative consumer model or the location m
The Callaway Company's cost of equity is 22%. Its before-tax cost of debt is 13%, and its marginal tax rate is 40%. The firm's capital structure calls for a debt-to-capital ratio of 45%. Calculate
What might happen to price expectations with the policy case you defend and how may these expectations affect the outcome of your policy initiative?
The following shows interest rates and exchange rates for the U.S dollar and the Philippine peso in 2007. The spot exchange rate is 47.46 pesos= $1. Compute the missing entries:
Which model do you think is more appropriate for analysis of that market: the representative consumer model or the location model?
How they might be seen as complements? How might trade barriers (or lack of trade barriers) be related to this question?