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A decision maker wishe to minimize the cost of producing a given level of total benefit, B = 288. The cost function is C = 6x + 3y and the total benefit is B = xy. Set up the Lagrangian adn then deter
Where is the price of peaches, is income, is the price of apricots, and is rainfall. Assume that and .
One reason for government intervention in the economy is to discourage the consuption of goods which have negative externalities. Carefully explain why and the extent to which these goods should be ta
Explain why this statement and the assumption that net receipts will be zero at an output where marginal revenue equals marginal costs are wrong.
A competitive firm can sell all of its output for the market price of $5. its short run cost function is TC= 1000 + Q + 0.005Q2. this cost function has marginal cost given by MC= 1 + 0.01Q.
From 1970 to 2000, the supply of college graduates to the labor market increased dramatically, while the supply of high school (no college) graduates shrank. At the same time, the average real wage of
A table saw costs $175 at a local store. You may either pay cash for it or pay $35 now and $12.64 a month for 12 months beginning 30 days hence. If you choose the time payment plan, what nominal annua
As a member of the Presiden'ts council of Economic Advisors, you estimate that an increase in the federal deficit of a given amount will increase equilibrium income by twice that amount. If the goal o
The article states that between 285 and 1,437 people in the United States could die if everyone were vaccinated against smallpox. The population in the United State is about 300 million people. What i
Suppose a monopolist can purchase Labor at a price w = 27 and can purchase Capital at a price r = 3. The monopolist’s production function is given by Q = L1/2K1/2. The demand facing the monopoli
An investment of $5000 in Biotech common stock proved to be very profitable. At the end of 3 years the stock was sold for $25000. What was the rate of return on the investment?
If hotel management decides to price-discriminate in a manner that maximizes profit, what will be the marginal revenue in each of the market segments, A and B?
Lou's preference over pizza(x) and other goods(y) are given by U(x,y) = xy, with associate marginal utilities MUx=y and MUy=x. His income is $120.
Suppose the demand curve for a monopolist is QD=500-P and the marginal revenue function as MR=500- 2Q The monopolist has a constant marginal and average total cost of $50 per unit a. find the monopoli
After graduating from HS, Ron plans to go to college. The college tuition is 15,000 a yr. But instead of going to college Ron can take a full time job that pays 20,000. If Ron decides to go to college
Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent decision you made. It could be a decision as simple as whether to eat out or cook your own dinner, or i
When deciding how much of their income to save for retirement, should workers consider the real or the nominal interest rate that their savings will earn? Explain.
MPS= 40 with no government and no foreign trade a 10 billion dollar increase in investment will enventually result in an increase in consumption or spending and how much?
Does farming in the United States have the characteristics of perfect competition? How does perfect competition in the farming industry help farmers and consumers? or Hurt farmers and consumers?
The maintenance costs associated with an investment are $0 for the first 8 years and $ 700 per year thereafter. The investment has an infinite life. With interest at 9 % per annum, determine the prese
Consider a market for a homgeneous product with demand given by Q = 37.5 - .25P. There are two firms, each with a constant marginal cost equal to 40.
Assume that Johnson deposits $350 of currency in his account in the XYZ bank. Later the same day Swanson negotiates a loan for $2000 at the same bank. In what direction and by what amounts
Carefully explain what happens to the demand for a Giffen good
Evidence suggests that there is less price competition in an oligopoly than other forms of market structure. Why is this the case?
Explain how monetary policy can be used to reduce inflation.