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1. Find the Cartel solution (total output and price) and compute the firms profits assuming equal split (each rm producing half of total output). 2. Find and draw on a graph the firms reaction funct
There are H consumers and n firms. The demand of each consumer is x(p) = 1 - p and the cost function of each firm is c(y) = (y)^2/2. Compute the competitive equilibrium price, quantity and the consume
1. Assuming that the input price is w = 1, compute the (short-run) competitive equilibrium price and quantity for any fixed number of firms, n. 2. Compute the long-run competitive equilibrium price
Joe runs a farm. He rents the land for $100 a day, and he can hire workers for $20 per day for each worker. His short run production function is given in the first two columns of the following table
A newly graduated engineer bought furniture for $900 from a local store. Monthly payments for l year will be made. Interest is computed at a nominal rate of 6%. What interest is paid in the last mon
A student taking economics, statistics, and finance has decided to spend 9 hours per week studying. The objective is to maximize the average grade, which means maximizing the total grade in the thre
a. What is the average miles per gallon for city driving b. On average, how much higher is the miles per gallon for highway driving as compared to city driving c. What percentage of the cars have four
A manager in charge of new product development can hire engineers and market researchers. The annual salary of an engineer is $40,000 while a market researcher receives $20,000. The marginal contrib
Assume 2 firms are in the market, producing at constant marginal cost=0. Consumers incur transportation costs which are quadratic in the distance traveled; specifically, a consumer located at positi
Calculate and print out the balance due, principal payment, and interest payment for each period of a new car loan. The nominal interest is 9% per year, compounded monthly. Payments are made monthly
Suppose Bruce Springsteen's objective in choosing whether to auction the tickets or to set a price of $100 is to maximize the market consumer surplus. Which does he choose: an auction or a $100 pric
The required reserve ratio is 0.25. What are the required reserves on this new deposit What is the largest loan that the bank can make on the basis of the new deposit If the bank chooses to hold res
Consider the following demand schedule. Does it apply to a perfectly competitive firm Compute marginal and average revenue. Price Quantity Price Quantity Suppose the marginal cost of producing the goo
Dell sells its computer for $2000=14000 Yuan in China. If the Yuan/dollar exchange rate goes up 10% (dollar value increase 10%), what will happen to the price of the computer in Yuan How about the d
Jim Duggan made an investment of $10,000 in a saving account 10 years ago. This account paid interest of 5½% for the first 4 years and 6½% interest for the remaining 6 years. The inter
A woman made 10 annual end-of-year purchases of $1000 worth of common stock. The stock paid no dividends. Then for 4 years she held the stock. At the end of the 4 years she sold all the stock for $2
Output Fixed Costs AFC Variable Cost AVC Total Cost ATC MC 1 $50 50 $30 30 $80 80 2 $50 25 $50 25 $100 50 20 3 $50 16.66666667 $80 26.66666667 $130 43.33333333 30
Joe the Plumber runs a competitive firm. He does 20 works per week, and charges $50 per week. His total cost each week is $1200, of which $300 is Fixed cost. Draw a diagram about his short and long
Zaley and Iris have Legos andcrayons. Zaley has 5 Legos and 5 crayons, Iris has 2 Legos and 8 crayons. Zaley's utility function for Legos andcrayons is uz(lz, cz) = lz · cz where lz and cz re
Due to its remoteness, Siberia can be considered as a closedeconomy. Recent data about its popula- tion movements indicate thatthe region suffered from a severe loss in its working agepopulation fro
Assume velocity is constant, real income is constant at Y ¯= 200 and that the demand for real money balances is given by: L(i, Y ) =Y/√i (9) (a) If expected inflation is z
"Suppose the production of airframes is characterized by a CES production function: Q=(K^0.5 + L^0.5)^2 (MPL = (K^1/2 + L^1/2) /L^1/2), MPK = (K^1/2 + L^1/2) /K^1/2) Suppose that the price of labor
the equilibrium national income is €100,000. thegovernment estimates that full employment would be achieved atalevel of income of €110,000. the mpc=.8, the mpm=.3 a)how much of government
Suppose M=$100, and prices are P1= $20 andP2= $20; calculate the utility maximizing quantities ofX1 and X2. If price of good 1 drops to $10,what would be the demand for X1. Using this information,dr
a) Calculate the equilibrium price and quantity, and show them on a diagram. b) Assuming a price higher than the equilibrium price, anddetermine the excess supply.