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The value of a successful project is $420,000; the probabilities of success are 1/2 with good supervision and 1/4 without. The manager is risk-neutral, not risk-averse as in the text, so his expecte
Determine the output level, price, and profits that will occur in long-run equilibrium. Assume a high-price, low-output scenario assuming a parallel shift of the firm's demand curve. Be sure to expl
A monopolist faces demand given by: P = 100 - 0.4Qd, and has marginal costs given by MC = 10 + 0.2Q a. draw the demand, marginal revenue and marginal cost curves. Calculate and show how much this fi
You have a contractor make improvements to a business rental for a fixxed price of $64,000. With this improvement you can obtain additional rent payments of $1,200 per month. You estimate the improv
The market rpice for siding and triming a house is $10,000. The Total Cover-Up Co. has fixed costs of $4,000 for ladders, supplies and so on, and the company's variable cost for siding are: Output i
Suppose the demand for a product is given by P = 30 - 2Q. Also, the supply is given by P = 5 + 3Q. A) What is the equilibrium price and quantity of the product B) What is the price elast
Suppose Mary earns $13 an hour installing transistorized digital chips in electronic calculators. If you were unemployed, would you offer to work for $8 an hour to get the job Why might a profit-max
Frances has lived in an apartment for ten years when she decides to buy a house. Her one-year lease will end on May 1. On April 15, she orally con¬tracts to buy Smith's house for $100,000, with
Consider a consumer who contemplates his optimal consumption plan for two period. Assume that the interest rate at which all consumers can borrow and lend is 10%. This consumer has income 60 in peri
Your enterprising uncle opens a sandwich shop that employs 7 people. The employees are paid $6 per hour, and a sandwich sell for $3. If your uncle is maximizing his profit, what is the value of the
profit contribution analysis. Kathy's Bakery is a full -service bakery in Omaha, Nebraska. Kathy sells loaves of wheat bread for $3 a loaf. Of this amount, $1.50 is profit contribution. She is consi
At the request of domestic producers, the Taiwanese government imposes a tariff of 500 per imported computer. Find Taiwanese consumption, production, and imports of computers after the imposition of
The market for taxi services in a Midwestern town is monopolized by firm 1. Currently, any taxi services firm must purchase a $40 thousand "Medallion" from the city in order to offer its services. A
Calculate the net cumulative change in aggregate expenditure if taxes were cut by $200 billion and MPC is estimated to be .75. What if government expenditure was increased by $200 billion
Suppose a second nation has the following data. Plot the PPC, and then determine which nation has the comparative advantage in which activity. Show whether the two nations can gain from specializati
A firm is considering two different methods of solving a production problem. Both methods are expected to be obsolete in six years. Method A would cost $80,000 initially and have annual operating co
Suppose there is a monopoly in the market. What is the optimal quantity produced What is the monopoly price Denote optimal quantity and price with y*m, p*m. Represent the equilibrium in a grap
Assume a worker (W) can produce output (X) for an employer by increasing his effort (E) according to the following equation: X = (1.5)E. Assume that the compensation paid by the employer (Y) increas
Find the Break Even Quantity of production for the following information. Given: Investment = $300,000 Salvage= $20,000 interest = 15% N (period)= 7 Annual Expenses = $15,000 Gross Margin per unit = $
The table below shows the total production of a firm as the quantity of labor employed increases. The quantities of all other resources employed are constant. Compute the marginal and average produc
If you invest $499,000 and you have an annual expense of $45,000 in year one which increases by $9,900 each year there after. Annual revenues are $199,000 each year. What is the Present Worth of the
Suppose Ann is working on a project with John. Both must decide whether to put into a decent amount of effort into the project. Since Ann is the leader of the project, her contribution determines wh
PC Connection and CDW are two online retailers that compete in an internet market for digital cameras. While the products they sell are similar, the firms attempt to differentiate themselves through
She estimates that the total cost of operating the office is approximately $48,000 per year. The potential revenue is estimated as $100,000 per year. Compute accounting cost, accounting profit, cono