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Explain the law of diminishing marginal returns and show graphically how it affects labor demand curves.
Would the compensated demand curve for HDTVs be flatter or steeper than the uncompensated demand curve? Explain your answer using a carefully-labeled graph.
Suppose that the government cuts taxes in response to a recessionary gap. Illustrate how this policy action might actually prove to be counterproductive.
Find the firm's optimal level of output when p = 9. Find the firm's optimal level of output when p = 1.
Find the output level that minimizes average total cost and corresponding value of average total cost (ATC) where marginal cost is 8q (MC = 8q).
Suppose a firm has the following expenditures per day: $150 for wages and salaries and $50 for materials. What is the economic profit for this firm?
Suppose a firm has cost curve c(q) = 18 + 2q + q^2/2 (a) For what values of q does the cost curve exhibit diseconomies of scale?
How much profit does each producer make? How much deadweight loss does the Cournot duopoly generate?
How much output should firm 1 produce? How much output should firm 2 produce? What will be the market price per unit of natural gas?
Suppose there are two firms that produce two different goods, one with a price elasticity. Calculate the Lerner Index for both firms and interpret your results.
If you were a decision maker at Honda, would you make side-impact airbags standard equipment? Explain.
Suppose the short-run production function is q = L^0.5. If the marginal cost of producing the tenth unit is $5, what is the wage per unit of labor?
What can you say about the level of the real interest rate if people instead are risk averse?
Using the lag specification as determined by the Standard Error of the SPAC, develop the regression results and include an interpretation of the critical stats.
The local monopoly tries to maximize its profits by equating MC = MR and charging auniform price. What will be the marginal revenue?
Why would this's change the ultimate money-supply multipler? Explain both answers.
If the elasticity of demand and supply of oil are -0.20 and 0.40, respectively, what happens to the price of oil?
Explain clearly in your own words why this is a disequilibrium situation and what market forces will be at play to obtain uncovered interest parity.
Create a diagram of the U.S. banking system and the Federal Reserve System. List and define all terms contained in the diagram created in step 1.
Do you see any potential problems arising from such a significant time lag between the date of income evidence and the dates of effective coverage?
What was Hayek's contention with this view in The Meaning of Competition? Instead, what did Hayek say was the better way to examine competition?
After the sovereign default of the government in Argentina and the subsequent financial crisis. Do so based on the theory PPP and law of on price.
Illustrate your understanding of the concepts. Most importantly what happens to fixed cost as output increases? What happens to the variable cost?
What is the steady-state level of capital per effective worker? What is the level of consumption per effective worker at this steady-state level?
Which of the three theories of economic justice discussed in Chapter Three. Why have you selected this theory and rejected the others?