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Applied Economics

Pricing Strategy

A market has only two sellers. They are both trying to decide on a pricing strategy. If both firms charge a high price, then each firm will experience a 5% increase in profits. If both firms charge a low price, then each firm will experience a 3% increase in profits. If Firm 1 charges a high price and Firm 2 charges a low price,

Statistical Quality Control

Small boxes of NurtraFlakes cereal are labeled "net weight 10 ounces." Each hour, random samples of size n = 4 are weighed to check process control Five hours of observations yielded the following: Weight Time Box 1 Box 2 Box 3 Box 4 9 a.m. 9.8 10.4 9.9

MBA economics

In a particular region, there are two lakes rich in fish. The quantity of fish caught in each lake depends on the number of persons who fish in each according to Q1= 10N1-.1N1^2 and Q2=16N2-.4N2^2 where N1 and N2 denote the number of fishers at each lake. In all, there are 40 fishers. Suppose N1=16 and N2=24. At which lake i

Hedging Foreign Exchange Risk: Euros and USD Currency

1. A U.S. importer who owns a Belgian company 500,000 Euros payable 30 days from today expects that U.S. dollars will weaken during this period. What would you advise the importer to do? What would happen if the U.S. dollars were to strengthening during this period? 2. A U.S. importer purchases a currency option. If the fore

isocost and isoquant example

1. Suggest the new leadership in Congress decides to repeal some of the tax breaks granted to large businesses during the past several years. If investment tax credits granted earlier are either repealed or eliminated, what impact will the repeal have on the exporting of jobs to foreign countries? Explain using isoquant/isoco

Marginal Product of Labour and Capital

Suppose that Japanese and U.S automakers produce on identical isoquats and that wages are higher in Japan than in the United States. Do autoworkers in Japan have a higher marginal product than American autoworkers?

Present value

When the net present value is positive: a) the internal rate of return equals the cost of capital b) the internal rate of return exceeds the cost of capital c) the internal rate of return is less than the cost of capital d) the internal rate of return equals zero

Black Scholes Model - Value of a Call Option

For a call option on a non-dividend paying stock, the strike price is $29, the stock price is $30, the risk-free rate is 6% per annum, the volatility is 20% per annum and the time to maturity is 3 months. What is the price of the call option? a. $2.02 b. $2.35 c. $2.67 d. $2.89 e. None of the above.

Net benefit of a college education

A high school graduate is considering whether to attend college. He predicts that his earnings, if she doesn't attend college, will be $25,00 per year (real). he predicts that his earning after four years of college will be $37,000. tuition costs are $5,000 per year. assume that college begins at age 18 and ends at age 22, and t

competitive economy

Consider a competitive economy that had 4 different jobs that vary by wage and risk risk (r) wage (w) job 1 1/5 $3 job 2 1/4 $12 job 3 1/3 $23 job 4 1/2 $25 all workers are equally productive but workers vary in their preferences. conside

Competitive Market

In a perfectly competitive market, individual firms can not impact the market price of their good or service. True False

Ozone Depletion

Other than financial assistance, how might industrialized countries help developing countries to control ozone depletion?

Total revenue exceeds peak

I know that when Total Revenue reaches its peak (TR=1), then the Marginal Revenue =0, but when Total Revenue exceeds its peak, what does the Marginal Revenue reach?

Discount Retailer industry

How is it that WalMart was able to find success in the discount retailer industry? Competition seems to be so fierce among the giant retailers, after discounting and lower profit margins, how is profitability possible?

Case Study-Control Data

I have a short case study to analyze. However, I don't know how to defend my answer properly. There is no right or wrong answer, but I need to have a valid argument to the answer. In general, a clear written explanation is enough, but if you want to use graphs, numerical examples, or anything else to strengthen your argument, th

Research positive and negative externalities of airline industry

Find 2 sources to help you answer the following questions about the industry you chose: Research any negative or positive externalities the industry produces. 1) Does the transaction of a buyer and seller directly affect a third party? Is the effect a negative or positive externality? Please explain. Research whe

Money Multiplier Ratios

1. Assuming individuals hold no currency, calculate the simple money multiplier using the following reserve ratios: 5%, 10%, 20%, 25%, 50% 2. What is the impact of these ratios on the level of new money that can be created given a $100,000 cash deposit into the banking system?

Workers start at firm A when they are 18...

Workers start at firm A when they are 18. The VMP of each worker remains $18 throughout their work life. Given the firm's concern that workers shirk, they start workers at $10 and increase the pay by $0.40 each year they are on the job. Assume that the firm does not have a pension plan and r=0 for all workers. (i) For wha

Labor economics

2. Andre's wage-schooling locus can be described by the following table Years of Schooling Annual Earnings 11 22,000 12 30,000 13 35,000 14 38,000 15

firm in an oligopolistic industry

A firm in an oligopolistic industry has the following demand and total cost equations P = 600 - 20Q TC = 700 + 160Q + 15Q squared Calculate: A. Quantity at which profit is maximized B. Maximum profit C. Quantity at which revenue is maximized D.Maximum revenue E. Maximum quantity at which profit will be at

Achieving .99 Reliability

Assume you have a product with reliability of .90 at 1000 hours. Your customer wants a reliability of .99. Explain what you can do, if the best technology was used to produce the components of the system to achieve the .99 reliability?

Reliability using normal distribution

Assume you tested svereral Firestone tires and recorded their failure times (as defined by an engineer).After doing a Chi-Square test ,you decided taht failures are normally distributed ,with mean failure of 50,000 miles and a standard deviation of 10,000 miles .Determine the following: a) reliability of the tires at 40,000 m

Indifference curves for consumption and leisure

Imagine a truck driver that has complete control over his daily work schedule. He has no alternative income (from any source). Out of biologically necessity, he must sleep eight hours a day. Other than that, he can spend the rest of his time driving. If he drives all of his available time, he can afford to consume $192 worth


Calculate the totals change in a year's GDP A family sells a home, without using a broker, for $150,000. They could have rented it on the open market for $700 per month. They buy a 10-year old condo for $200,000; the broker's fee on the transaction is 6% of the selling price. The condo owner was formerly renting the unit fo

Foreign operations and currency denomination

Select a U.S. multinational company. In terms of currency denomination, discuss how the firm prices its revenues and costs. For MNE's with multiple foreign operations, consider any one of those operations and the contribution it is making to the parent firm's profits. Using this information, what do you think would be the effect

Economic justification

If an owner of a company wanted to make a trip for non-business use and their lost wages was not tax-deductible, how could they justify making their decision whether to go or not?