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Q1. Consider a fair gamble (v) of winning or losing $1. For this gamble, what is E(v^2)? Q2. Now consider varying the gamble in part (a) by multiplying each prize by a positive constant, k. Let h =
There is some uncertainty about the auction design that will be used, so you must suggest an optimal bidding strategy for the following auction designs:
Remox Corporation is a British firm that sells high-fashion sportswear in the United States. Congress is currently considering the imposition of a protective tariff on imported textiles. Remox is co
Marginal revenue product is defined as the change in total revenue that results from the employment of an additional unit of a resource. A producer wishes to determine how the addition of pounds of
Question 1. How do firms benefit from economies of scale? Question 2. What might be some potential disadvantages of being part of a large corporation?
The graph above shows the demand and supply of socks for the country of Bangladesh. 1. If trade is avoided, Bangladesh consumes _____ pairs of socks at a price of _____ per socks.
A) Find the profit maximizing production levels for paper and cardboard. B) If the local government imposes a tax of $5,000 per year on the firm, will this alter your answer to part a? Explain.
Labor is only variable input. Output is 4000 unit Marginal Product of labor is 10 Average Product of labor is 50 Price of labor is $150 Marginal product of capital is 40 Average product of capital i
Suppose Labor is a Variable Input. Capital and Land are the inputs that requires the longest time period before they can be adjusted. Explain the movement of the resources in both SHORT RUN and LONG
Problem: Suppose that production were represented by the production function displayed in the table above. You would conclude that: A) land displayed diminishing returns. B) labor displayed diminish
If the total cost of producing 10 units is $100 and the marginal cost of the eleventh unit is $21, then which of the following is NECESSARILY true?
Problem: Support costs have increased in today's manufacturing environment because:
Suppose now that Billy is in charge of deciding how many books the publisher should produce in (a). What is Billy's profit maximizing condition in this case? Find the quantity and price that Billy w
In what ways does the invention and diffusion of double entry bookkeeping represent a process of productivity increase in the business activity of the 15th century.
What are the total damages (costs) associated with drill production? What is the sum of marginal damages associated with drill production?
Suppose K is fixed at 10 in the short run. Calculate the firm's short-run total and average cost curves. What is the marginal cost of the 10th, 25th, 50th, and 100th unit?
Calculate the paths over time after the slowdown of k, the ratio of capital to effective labor, of y, the ratio of output to effective labor, of K/Y, the capital-output ratio, and of Y/L, output per
a) From the community’s point of view, what is the optimal number of guards to hire? b) If the hiring of security guards is left up to individual residents, how many would be hired?
Analyze which airline has lower costs, and explain your reasoning clearly. Be sure to include definitions of accounting and economic costs of operation in your analysis.
a. What is the difference between elastic and inelastic demand. Please be precise. b. If a restaurant increases its price of coffee from $ 1.00 to $ 1.20 and quantity demanded falls from 100 cups to
The production function for the personal computers of DISK Inc. is given by Q= 10 (K *L)^0.5. DISK's competitor FLOPPY Inc's production function is Q = 10K^0.6 L^0.4.
Problem: Construct a production possibilities frontier for a nation facing increasing opportunity costs for producing food and video games.
The marginal cost of mining a diamond is a constant $1,000. The following schedule shows demand for diamonds that are mined in South Africa and Russia.
The business unit is looking for a 15% markup. If the units sell for $28.00 per unit, what is the break-even point and the shut down point for production. Draw the cost graph for this operation and
You've been hired by an unprofitable firm to determine whether it should shut down its unprofitable operation.