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Explain and show graphically why a firm with monopoly power hires less labor than a firm hiring labor is a competitive market.
Suppose the firm can engage in third-degree price discrimination (charging a different price for each type). What price should the firm charge type A consumers?
Illustrate this scenario in an AS-AD diagram. What is initial level of cyclical unemployment? What happens to output and inflation in the short run equilibrium?
What effect will the exogenous tax cut have upon our AD-AS diagram? What happens to output and inflation in the short run equilibrium?
How much will the consumer demand of good x given p to maximize her utility? Call this x(p). (don't forget to check the SOC)
Why should you produce more or less output of corn and WHY? Also, does your profit increase or decrease? Explain.
Determine by how much this driver will choose to exceed the speed limit (x*). Sketch marginal benefit and marginal cost on a graph to illustrate your result.
What are the market supply functions for power and jobs? What is the income of both, expressed as a function of prices?
Consider the finite-horizon alternating-offers bargaining model in which the last period T is even. Find the SPE outcome and discuss its limiting properties.
Consider firm that is considering marketing its innovation in multiple countries. What factors should this firm consider in formulating its protection strategy?
Briefly describe the disadvantages a pure domestic firm may have under the foreign exchange operating exposure.
Break into teams and identify four reasons that an international airline such as Southwest or Delta would invest in a project when its direct analysis.
Recently, a new tanning club opened which offers identical facilities but which charges a flat fee. Draw Bob's budget line if he were to join this new club.
Calculate total revenue. Calculate total cost. Calculate total variable cost. Calculate total fixed cost. Calculate profit.
If banks borrow from the Fed's discount window, what would happen to the money supply (assume no offsetting Fed actions)? Explain
A balance sheet is often used by analysts to examine a company from a financial point of view. Describe strengths and weaknesses of document for this purpose.
The British pound appreciated (in real terms) significantly between 1977 and 1981. Find two main reasons for this appreciation.
What were the business cycles and long-term trend of the economy from the 1960s to now, and the main factors behind its growth?
What is the equilibrium level of GDP? The full employment GDP level? Explain. What is the value of the MPC? The multiplier?
Should the firm reduce the selling price of the microchip by $0.20. Explain why or why not.
Pricing Many supermarkets sell both branded and private label goods. How should it price its private label cola?
Why do publishers offer discounts to students? What is the purpose of developing less powerful editions? Hint: price discrimination theory.
What principal agent problems exists in market? What principal agent problems exist in firm? What are possible solutions to principal agent issues within firm?
What price would drive the firm out of business? How much would it cost the incumbent firm to drive the rival out of the market?
Suppose you are the owner-operator of a gas station in a small town. Over the past 20 years, you and your rival have successfully. What would you do today?