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Suppose customers believe that the good they are buying is of high quality with a probability of p, and of low quality with probability 1 - p. A high quality good is valued at vH and costs cH to pro
a) How many firms will operate in this market at a long-run equilibrium b) How would your answer change if each firm faced a price elasticity of demand of -4/3 and charged a profit maximizing price
a) If the market cannot be segmented, what is the uniform monopoly price b) If the night club can charge according to whether or not the customer is a student but is limited to linear pricing
The labor hours required to produce one unit of wheat in the United kingdom 2. The labor of producing one unit of wheat in the United states is 1. What is the opportunity cost of producing a unit of
Construct a demand and supply diagram. Use a demand curve that you think reflects the normal short-run price elasticity of demand for gasoline and a supply curve that you think reflects the normal s
The federal government estimated that the elasticity of demand for cigarettes among teenagers is equal to 2. If they want to reduce smoking by 50% among this group and the price of cigarettes is $6.
Jane quit her job at IBM where she earned $50,000 a year. She cashed in $50,000 in corporate bonds that earned 10% interest annually to buy a mini-bus. Jane has decided to buy the mini-bus and set u
The following utility function represents the preferences of agent i over two goods x1 and x2: ui(x1,x2) = 3√x1 + x2 a)Solve the optimal choice problem for agent i if p1 = p2 = 1; and I=15
Two large-scale conduits are under consideration by a large municipal utility district (MUD). The first involves construction of a steel pipeline at a cost of $225 million. Portions of the pipeline
Confirm firm 1's optimal price depends on P2 according to P1=52.5+.25P2 (Set up profit expression of profit firm 1=(p1-30)Q1 =(P1-30)(75-P1+.5P2) and set Marginal Profit = 0 to solve for P1 in terms o
assume that all other banks hold only the required amount of reserves.if ABC DECIDES TO REDUCE ITS RESERVES TO ONLY THE REQUIRED AMOUNT ,BY HOW MUCH WOULD THE ECONMY'S MONY SUPPLY INCREASE
Bank North advertises, "We pay 6.5%, compounded daily." Bank South advertises, "We pay 6.5%, compounded continuously." If you deposit $10,000 with Bank South for one year, how much additional intere
You are taking a $2000 loan. You will pay it back in four equal payments, paid every 6 months starting 3 years from now. The interest rate is 6% compounded semiannually. Calculate: (a) The effective
Picabo borrows $1,000. To repay the amount she makes 12 equal monthly payments of $90.30. Determine the following: (a) The effective monthly interest rate (b) The nominal annual interest rate
Picabo borrows $1,000. To repay the amount she makes 12 equal monthly payments of $90.30. Determine the following: (a) The effective monthly interest rate (b) The nominal annual interest rate (c) The
Each of these customers will buy at most one diamond-and only if the price is just equal to, or lower than, her willingness to pay. Raquel's willingness to pay is $400; Jackie's, $300; Joan's, $200;
Kate's Katering provides catered meals, and the catered meals industry is perfectly competitive. Kate's machinery costs $100 per day and is the only fixed input. Her variable cost is comprised of th
a. An industry with five firms that have the following market shares: 50 percent, 30 percent, 10 percent, 5 percent, and 5 percent. b. An industry with five firms that have the following market share
A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $ 1,000 per diamond, and the demand for diamonds is
A man makes an investment every 3 months at a nominal annual interest rate of 28%, compounded quarterly. His first investment was $100, followed by investments increasing $20 each 3 months.
A local lending institution advertises the "51-50 Club." A person may borrow $2000 and repay $51 for the next 50 months, beginning 30 days after receiving the money. Compute the nominal annual inter
The following table provides the quantity of fish and coconuts that each individual can catch or gather in one hour. Coconuts Fish Adam 6 2 Friday 6 4 a. Who has the absolute advantage in catching fis
Be certain to explain carefully why the policies are significant from your perspective. Briefly offer evidence as to their success.two specific government policies (pertaining to each of the two reso
Output 1 2 3 4 5 6 7 8 9 Variable Costs $35 75 110 140 175 215 260 315 390 a. Show AFC, ATC, AVC, and MC in a table b. Graph the AFC , ATC, AVC, and MC curves c. Explain the relationship between the M
Marginal revenue product is defined as the change in total revenue that results from the employment of an additional unit of a resource. A widget producer wishes to determine how the addition of pou