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What do you make of the claim by Mr. Z that I simply can't make a go of my McDonald's franchise on the interstate- the landowner just wants too much rent?
Aren't fixed costs a bad thing? They must be paid! How can they be one component of a good thing? Can you set this student straight?
Explain why a decision by people to no longer buy diamond engagement rings would have disastrous consequences for diamond cutters.
Dr. E. is an environmentalist and a critic of economics. On The Charlie Rose Show. How would you defend the analysis in this book against this tirade?
HDr. D. is a critic of standard microeconomic analysis. In one of his frequent tirades, he was heard to say. How would you defend the analysis in this chapter?
Wouldn't firms make more in short-run profits if they opted always to produce that output level for which average costs were as small as possible?
Why is the price for which quantity demanded equals quantity supplied. Using this view of demand and supply, how would you define an equilibrium quantity?
How would a fisher know that his or her price was too high? How would a fisher know that his or her price was too low?
Graph these demand and marginal cost curves. Calculate the marginal revenue curve associated with the demand curve; graph this curve.
Wildcat John owns a few low-quality oil wells in Hawaii. He was heard complaining recently about the low price. What do you make of John's production decisions?
What kind of signal does a higher price send to a firm with increasing marginal costs?
Find the Nash equilibrium or equilibria. Does either player have a dominant strategy? What game from the chapter does this resemble?
Why does the Nash equilibrium allow for outcomes with noncredible threats? Why does subgame-perfect equilibrium rule them out?
The Battle of the Sexes is a coordination game. What coordination games arise in your experience? How do you go about solving coordination problems?
Why is the Prisoners' Dilemma a dilemma for the players involved? How might they solve this dilemma through pregame discussions or postgame threats?
How would a change in the interest rate affect the value of original option? Is this unrealistic feature of this example? How would you make it more realistic?
Sophia is a contestant on a game show and has selected the prize. Explain why Sophia's degree of risk aversion might affect her willingness to buy this option.
What is Molly's utility if she buys from the location she knows? What is Molly's utility if Crazy Eddie's really does offer a lower price?
Describe the isoquant map for the production of air trips. How would this affect the average productivity of capital (planes) in this industry?
How would you construct an isoquant for the firm for 100,000 gizmos per day? The firm uses plants only of the type specified in question 7.
Explain why the production function for the entire UG firm exhibits constant returns to scale.
Marjorie Cplus wrote the following answer on her micro examination: ‘Virtually every production function exhibits. How would you grade Marjorie's answer?
Roy Dingbat is the manager of a hot dog stand that uses. What does this imply about the 1,000 hot dog isoquant? Why do Roy's management skills justify his name?
Our analysis in this chapter suggests that individuals have a utility-maximizing amount of information. Explain why some degree of ignorance is optimal.
What is meant by each one of these factors in the context of the decision to drop a course? How do the factors affect the value of this option?