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Yet teachers, not athletes, are considered essential to economic growth and development. Why then do athletes receive higher salaries than teachers?
What impact would a large influx of immigrants have on real wages? What impact would it have on real wages in the immigrant's home country?
What do you think is likely to happen to the engineering and poetry programs at Middle State?
An entrepreneur considers the following investment opportunity. Should he undertake the investment if the interest rate is 8 percent? 10 percent?
Why is the cost of the lecture note taker a fixed or variable cost of selling an additional subscription?
What is the marginal product of the 51st worker? What is the marginal cost to produce one more vest?
How could this be possible? What is Mrs. Bill assuming about the output range in which Buffalo Bill is currently producing?
Illustrate the SRATC, AVC, MC, and MR curves for a perfectly competitive firm that is operating at a loss. What is the output level that minimizes losses?
Industry councils promote the consumption of particular types of farm products. These groups urge us to Drink Milk. Explain this advertising strategy.
Why must price cover AVC if firms are to continue to operate? Why is it possible for price to remain above the average total cost in the short run.
If the average total cost is $6 per unit, what will be the firm's profit? What is the relationship between profit, price, and average total cost?
How does the story of long-run equilibrium in a perfectly competitive industry illustrate Adam Smith's invisible hand?
Graph and explain the adjustments to long-run equilibrium when market demand decreases in a constant-cost industry.
Describe what would happen to the industry supply curve and the economic profits of the firms in a competitive industry if those firms were currently earning.
A patent gives a firm a monopoly in production of the patented good. Why do consumers suffer a cost? Is it greater than the profits earned by the monopolist?
Why would a monopolist ever stay in business? Why might it be possible for a monopolist to earn positive economic profits in the long run?
What is meant by the welfare loss of monopoly? Why does no welfare loss occur if a monopolist successfully practices perfect price discrimination?
How can the placement of the vending machines create a monopoly? What if other vending machines are close by and are not owned by Coca-Cola?
Why might the introduction of competition increase the efficiency of these industries?
How might costs differ in these time periods? What would be the effects of charging a higher toll to cross the bridge during busy times?
If Frank's hot dog stand was profitable when he first opened, why should he expect those profits to fall over time?
What must be true of price versus average total cost for such a firm? What will happen to the firm's demand curve as a result of the short-run profits?
Draw a graph showing a monopolistically competitive firm in a short-run equilibrium where it is earning economic losses.
Why do you think buffaloes became almost completely extinct on the Great Plains but cattle did not?
What kind of problems does the government face when trying to perform a cost-benefit analysis of whether or how much of a public project to produce?