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John Engel is a sales agent for the ABC Company. He has a reservation wage of $1,500 and an effort cost function of C = e2. His wage package is W = 1,500 + 0.2Q where the CEO sets the incentive at 0
Its marginal cost (MC) is $9,000. Discuss what will its price be if it decides to sell the automobiles by it and what will the price be if it sells though DistriCorp, Inc. an independent distributor
Suppose that the nominal interest rate on 10 year bonds is the 10% at home and 6% abroad. Further assume inflation is expected to be 3% abroad and 6% at home.
Critically discuss at least two price-setting strategies that are commonly used by airline companies and calculate the impacts of such pricing methods on the demand for seats and the firm's profits.
Assume a monopoly firm produces the software and can sell the 20 items per month at a price of $70 each. In order to increase sales by one item per month, the monopolist must lower the price of its
Consider the single equation model yi=ziB+ri where the real valued let the B^ denoted the IV estimator of B^ using as an instrument a dummy variable di. Identify a simple expression for the IV esti
Superstar actors typically get contracts that identify that they get a percentage of "the gross," the total revenues that the movie brings in. Discuss why might actors want contracts structured that
An American consumer have come to accept the high gasoline prices, and calculates the world prices for the gasoline to increase even further with high demand from India and China.
To determine the growth in GDP, use the compounding growth function: p0 x (1+ r)t where the p0 is the original value of 100, r is the growth rate (for example, a growth rate of 2.1%
A representative firm with short-run total cost given by the TC = 50 + 2q + 2q2 operates in a competitive industry where the short-run market demand and supply curves are given by the QD = 1,690 - 4
A firm's current profits are $750,000. These profits are expected to grow the indefinitely at a constant annual rate of 5 percent. Determine the value of the firm: Round your responses to 2 decimal
At an output of 20,000 units per year, a firm's variable costs are $80,000 and its average fixed costs are $3. The total costs per year for the firm are:
You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than 1. To increase total revenues, you should:
The quantity demanded of a product increases as its price declines because the An increase in demand for oil along with a simultaneous increase in supply of oil will
Which is one of the five fundamental questions that need to be dealt with in any economic system?The economy of Germany would best be classified as:
If the prices of all the resources involved in the production of goods increase, the cost of producing those goods will increase at the same rate.
Dell and Hewlett-Packard have to make the decisions to cooperate or not cooperate in a new market. The following matrix of payments presents the benefits in millions of dollars. This matrix
Explain the properties and characteristics of the theory. Demonstrate how the theory is used in actions and interactions of individual actors in the economy.
A small country can import a good at a world price of 10 per unit. The domestic supply curve of the good is D = 400 - 5P, S = 20 + 10 P.Assume the demand and supply are exactly as described but there
Calculate the MIRR for the cash flows given below? The external rate of return for borrowing is the 5% and the external rate of return for investing is 15%.
Assume that Bank of America lends the $100,000 to Jill's Jerseys. Using T-accounts, how this transaction is recorded on the bank's balance sheet.
Graph the isquant and isocost associated with this example. Clearly mark the optimal point. Include the quantity and cost on the isocost and isoquant.
If a monopoly firm observes an increase in total revenue following a price increase, which of the following must be true?
Anna Lopez sells timber in a perfectly competitive market. Incomes increase, and many people buy new homes; the market demand curve shifts to the right.
The server follows a straight-line (SL) depreciation with zero salvage value at the end of its 10 year service. The management of a hospital is considering the installation of new server which resul