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Calculate the expected value of the "lottery", in which Maria participates and calculate the utility of the expected value of the lottery.
It is often alleged that Japanese producers receive subsidies from their government permitting them to sell their products at a low price in the U.S. market.
In a market economy, investors have a strong incentive to undertake profitable investments. What makes an investment profitable? Do profitable investments create wealth? Why or why not? Do all investm
A lender made the following statement to a borrower: “You are borrowing $1,000, which is to be repaid in twelve monthly installments of $100 each. Your total interest charge is $200
Consider two occupations (A and B) that employ people with the same skills and abilities. When employed, workers in the two occupations work the same number of hours per day.
Other things being constant, how will the following influence the hourly earnings of employees? Explain your answer. a. The employee must work the midnight to 8: 00 A.M. shift.
Jobs are the key to economic progress. Unless we create more jobs, our standard of living will fall
The earnings of engineers, doctors, and lawyers are high because lots of education is necessary to practice in these fields
Why are real wages in the United States higher than in other countries? Is the labor force itself responsible for the higher wages of American workers? Explain.
The demand for resources is a derived demand.” What is meant by that statement? Why is the employment of a resource inversely related to its price?
Barriers to entry are crucial to the existence of long-run profits, but they cannot guarantee the existence of profits
What determines the variety of styles, designs, and sizes of different products? Why do you think there are only a few different varieties of toothpicks but lots of different types of napkins on the m
Will firms in a price-taker market be able to earn profits in the long run? Why or why not? What determines profitability? Discuss.
Why does the short-run market supply curve for a product slope upward to the right? Why does the long-run market supply curve generally slope upward to the right?
When the firms in the industry are just able to cover their cost of production, economic profit is zero. Therefore, if demand falls, causing prices to go down even a little bit, all of the firms in th
In a price-taker market, if a business operator produces efficiently-that is, if the cost of producing the good is minimized-the operator will be able to make at least a normal profit
Farmers are often heard to complain about the high costs of machinery, labor, and fertilizer, suggesting that these costs drive down their profits
What are implicit costs? Do implicit costs contribute to the opportunity cost of production? Should an implicit cost be counted as cost? Give three examples of implicit costs.
If a firm maximizes profit. It must minimize the cost of producing the profit-maximizing output.
What is the principal-agent problem? When will the principal-agent problem be most severe? Why might there be a principal-agent problem between the stockholder-owners and the managers of a large corpo
What is economic profit? How might it differ from accounting profit? Explain why firms that are making zero economic profit are likely to continue in business.
Sue loves ice cream but cannot stand frozen-yogurt desserts. In contrast, Carole likes both foods and can hardly tell the difference between the two. Who will have the more elastic demand for yogurt?
A consumer is currently purchasing three pairs of jeans and five T-shirts per year. The price of jeans is $30, and T-shirts cost $10. At the current rate of consumption, the marginal utility of jeans
A bus ticket between two cities costs $50 and the trip will take twenty-eight hours, whereas an airplane ticket costs $300 and takes three hours. Mary values her time at $12 per hour
What conditions must be met for buyers to bear the full burden of a tax? What conditions would cause sellers to bear the full burden? Explain.