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If the Canadian production function is Cobb-Douglas with capital's share in total output 0.3, output growth is 3 percent per year, depreciation is 4 percent per year, and the capital-output ratio is
Household spending is given by the following equation: C = $100 + 0.70Yd and Intended Investment = $125. (a) Calculate the equilibrium level of income in the economy, and explain why this is the case.
Except for the CPI index numbers, assume these figures represent billions of U.S. dollars. Year CPI NGDIP RGDP1997 $160.50 $7,110.00 1998 $163.00 $4,896.47 The rate of growth of real GDP b
If each security guard is paid $200 a week, and the cost of the stolen radio is $25,a. how many guards are needed to hire b. If the cost of a stolen radio is $25, what is the most a firm should pay th
An oil company purchased an option on Land in Alaska. Preliminary geologic studies assigned the following prior probabilities. After 200 feet of drilling on the first well, a soil test is taken. The
A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit.The firm's total costs are C ( Q) = 40 + 8Q +2Q2. a.How much output should the firm produc
The owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the restaurant operates will increase by 20 percent at the beginning of the
A competitive firm uses a single input x to produce its output y. The firm's production function is given by y = x3/2 for quantities of x between 0 and 4. For quantities of a greater than 4, the fir
What is the relationship between the marginal cost and the average variable and average total costs You may fill in all the appropriate numbers and draw a graph with MC, TVC, AVC, TC, ATC, TFC, and
1. How do you know that the firm represented in the graph above is a purely competitive firm 2. To maximize profits, this firm will produce at what output level (one letter) 3. Explain why this MR=MC
You know that different types of consumers value your two products differently, but you are unable to identify these consumers individually at the time of the sale. in particular, you know there are
To produce one unit of the final output, the downstream division requires one unit of the input. If the inverse demand for the final output is P = 1,000 - 80Q would the company's value be maximized
Consider your current or former salary against the salary of pro sports players and movie stars. Michael Jordan made $40 million per year playing basketball and endorsing products in his day.
The net annual value added that can be attributed to this machine is constant over 8 years and amounts to $15,000. An effective income tax rate of 40% is used by the company, and the after-tax MARR
An injection molding machine can be purchased and installed for $90,000. It is in the seven-year GDS property class and is expected to be kept in service for 8 years. It is believed that $10,000 can
Suppose a typical consumer buys 20 units of food and 10 units of clothes in the year 2307, when the price per unit of food is 100 and the price per unit of clothes is 200. In 2308, when the typical
CrystalWater Pty Ltd and ClearWater Pty Ltd are the only producers of spring water in the local market. The market demand for spring water is given by P = 70 - Q1 - Q2. CrystalWater and ClearWater c
For each of the following utility functions, find the marginal utilities (MUx and MUy) and the marginal rate of substitutional between x and y (MRSxy) and explain whether MRSxy is diminishing or not
Suppose that the government taxes (at the new set of prices P'x = 1, P'y = 2 ) the consumer an extra 1/2 dollar for each unit of x he buys beyond 70 units. That is no tax for x<70 and 1/2 dollar
The price in a market is dominated by two firm is affected by the quantities supplied by both firms, Q1 and Q2: P = 120 - (Q1 + Q2). The marginal cost for the two firm is identical and constant and
Firm K can earn $25 million in profits from strategy S if firm L responds with strategy P, and $7.5 million in profit from S if L responds with strategy Q. Firm K can follow strategy T, which return
Nearby College has done a study of college enrollments and has concluded that the number of students in the fall term is give by Q = 5000 - .5T + .1Y + .2Tc Where Q = number of students enrolled full-
a. Compute the quantity sold and elasticity at a price of $1, and also at a $2 price, assuming the given advertising budget. b. What is the advertising elasticity at a price of $2 Give an interpretati
A former employee decides to sue QopyQatt, alleging employment discrimination. Although management claims innocence, they agree to settle out of court. The settlement requires QopyQatt to pay the e
Consider the following demand equations for two differentiated products produced by independent firms.For simplicity assume that costs are zero for both firms. Price reaction functions for the two fir