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Assume that demand for product A can be expressed as QA = 500 ¨C 5PA + 3PB and demand for product B can be expressed as QB = 300 ¨C 2PB + PA. Currently, market prices and quantities for&n
A firm produces 20 units of output at a market price of #5, a marginal cost of $5, and an average cost of $3. what is the firms economic profit and is the firm maiximizing its economic profit. Is
When McDonald's Corporation reduced the price of its Big Mac by 75 percent if customers also purchased french friesand a soft drink. The Wall Street Journal reported that the company was hoping the no
For each of the following products, write a few sentences answering the following questions: • Is price discrimination of any sort feasible? • If price discrimination is feasible,
What is a supply shock? Give an example of a current supply shock. Which way does this shock move the AS curve? What is the resulting impact on potential GDP and the price level?
The price of a wideget increases by 90%. What effect would we expect this to have on the equilibrium wage rate of workers who make widgets? Would this increase, decrease, or keep the wage rate th
While sitting in your office one evening, you begin to think about some of the key microeconomic messages you want to communicate to the Board. Key concepts include, but are not limited to, supply and
If a soybean grower for who price exceeds average total cost for a wide range of output is currently producing where Average Total Cost is at a minimum. What economic advice would you
The total operating revenues of a public transportation authority are $100M while its total operatiing costs are $120M. The price per ride is $1, and the price elasticity of demand for transportation
The average tax charge is $95. Assuming a normal distribution as a standard deviation of $10, use the approximate areas beneath the normal curve. what proportion of tax prep fees were exactly $100?
1. Chipo has the following utility function of 2 goods Pies (X) and fanta (Y): U= log X + log Y. (a) show that the consumer maximizes utility subject to the budget constraint. (b) deriv
John has a job that requires him to travel 3 of every 4 weeks. He has an annual budget and can travel either by train or by plaine. The airline on which he typically flies has a frequent traveler prog
Kimberly works for a well known financial company as a sales representative. She earns a small base salary but receives commission off every product she sells. Kimberly has basic
The country of Arkanslavia had money supplies of 183 million arkollars in 2010 and 644 million in 2011. They have real output of 791 arkollars in both years. In Arkanslavia velocity was 7 in 2010 but
If the government imposes a quantity tax on the consumption of a good, it means that the consumer has to pay for each unit of the good its price plus the tax. For example, if the price of a
If capital’s share of income is 25% and labor’s share of income is 75%, the stocks of both capital and labor increase by 50% (?K/K = ?N/N = 0.5), and there is no technology growth, At wh
One supply-side measure introduced by the Reagan administration was a cut in income tax rates. Use an aggregate demand/aggregate supply diagram to show what effect was intended. Use an aggregate dema
data collected in the imaginary economy of karabekiar reveals that when price of bork increased by 20%, the quantity of bork sold decreased by 15% and the quantity of perf demanded decreased by 10%.
If the numbers of home and commercial users are equal, and you cannot distinguish between commercial and home users, what is the most profitable pricing strategy? Assume the MC of prodcution is zero.
Suppose your marketing department does a survey of potential users and finds that these users place the following values on the two versions of your software. Software Version Home Users Commer
1.In an attempt to curb the problem of unemployment and win the forthcoming elections the government of the republic of zambia has decided to hire unemployed workers who had previously been receiving
The following is a cost function for clinic visits in a small inner city clinic: a.Determine the marginal cost for each level of output. b.If the price per visit is given to be $25, at wha
How will demand and supply curve shift? 1. Labor market for math and science teachers when wages available in private industries utilizing these skills rise. 2. Labor market for univers
Data Collected in the imaginary econmomy of Chipolaysia reveals that when the price of dorf decreased by 25%, the quantity of dorf sold increased by 10%, and the quanity of goo demanded decreased by 3