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Suppose that the low-skill job market is perfectly competitive and that the equilibrium wage and monthly output in the market absent government interference are $4.50 per hour and 1,000,000 hours.
Mensa's total cost of production, TC, is given by the equation TC = 5,000 + 5*q*q, where q is Mensa's output. Based on this equation, Mensa's marginal cost is 10q. If the output price is $100, what
Coldwell Banker is employing 10 acres of land and 50 tons of cement to produce 1,000 parking spaces. Land costs $4,000 per acre and cement costs $12 per ton. For the input quantities employed, MP L
Consider a monopolistically competitive market with N firms. Each firm's business opportunities are described by the following equations: Demand: Q=100/N-P Marginal Revenue: MR=100/N-2Q Total cost: T
Assume that the production and distribution technology for all the new rms is the same as SIT press i.e., each firm bear a cost of $2 for each copy. Identify the equilibrium price and compute the equi
Under Plan A, Mr. Huan will sell the house at a price of 700,000 yuan with probability 85%, sell at a price of 760,000 with probability 10%, and sell at a price of 670,000 with probability 5%.
Assume that the federal government increases spending on public works programs, such as highway construction, by $40 billion. How does this change in spending affect the aggregate demand curve
Suppose you mange a firm with two production plants. The marginal product of labor at plant 1 is MP1 = 1400 - L1 where L1 is the number of workers employed in plant 1. The marginal product of labor
Suppose a firm produces its output in two different plants. Production costs at plant 1 are given by C1 = 4(Q1)2, where Q1 is the amount of production at plant 1. The production costs at plant 2 are
Suppose a competitive firm produces spaghetti dinners. The market price of a spaghetti dinner is $20. The cost of making the dinners is given by C(Q) = 10Q + (Q2/160). The marginal cost is given by
a. Find the profit maximizing price and quantity. b. Assume that ATC = $35 at the profit maximizing quantity. Calculate the monopolist's total profit. A monopolist's Demand, MR and MC curves ar
Suppose the production function is Q = 1.52L.6K.4, and K = 100. a. What is the equation for the average product of labor If L=50, what is the value of the average product of labor
A furniture manufacturer is considering moving its production to India. Its production function is: Q = 1.52L.6K.4. In Canada, w = $24 & r = $4. In India, w = $4 & r = $24. a. What is the K/
The marginal propensity to consume is the amount that will be consumed out of each additional dollar earned. Suppose that the MPC has a value of 0.95. If this is true, then a $10 million increase in d
The banking system currently has $50 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. If the Fed raises the reserv
Consider an economy that is operating at full-employment level GDP. Assuming the MPC is 0.90, predict the effect on the economy of a $50 billion increase in government spending balanced by a $50 bil
There are 300 purely competitive farms in the local dairy market. Of the 300 dairy farms, 298 have a cost structure that generates profits of $24 for every $300 invested. What is their percentage ra
Assume that in a different competitive industry, there are 8 firms, each with a marginal cost equal to MC = 20-10q +q^2 Average cost is minimized at q = 10 and AVC is minimized at q = 8 for each of th
A city is concerned about rising rent for low-income households. Several policies being considered. Suppose there are a large number of construction companies, each with the identical cost function
Assume that there are a large number of identical firms in a competitive industry, each with the cost function: TC = 25+4q+q2 a. What is the minimum price at which firms will continue operating in the
Each head of broccoli costs $2 and each bag of peas costs $1. George has a budget of $20 to spend on broccoli and peas. But George is allergic to broccoli and would never buy it no matter how cheap
Consider a linear city Hotelling model. There are two firms, A and B, located at the (30) ends of the product space. The length of the product space is 3 and transportation costs are 1 times the dis
The maintenance for a bus, whose life is 10 years, is $1500 per year starting the fourth year, increasing by $200 for each successive year. The interest rate is 5% per year. What is the present wort
If Jacob receives by consuming ice-cream cone (X) and hamburger (Y) at Burger King is represented by the utility function U(X;Y) = XY. In addition, the per-unit prices of ice-cream cone and hamburge
TC= 41,000,000+0.005Q 2 MC= TC/ Q =$500 +0.01Q calculate profit maximizing activity level and optimal profit, and optimal profit as percentage of sales revenue. profit maximization problem