1. In a competitive market, the market-determined price is $60. For a typical firm producing 100 units of output, short-run marginal cost is constant at $65, average total cost is $95, and average fixed cost is $30. Is this firm making the profit-maximizing decision? If not, what should it do? a) No, it is not making the profit
Given that the invisible hand supposedly adjusts market supply and demand, how does it relate to the scarcity of resources? How does the invisible hand increase/decrease the scarcity of resources? Does theory and reality in economics actually differ? If so, why?
The equilibrium price for physiotherapy visits is $30 and the quantity utilized is 150 visits as a result of the demand and supply conditions in this diagram. The state legislature is concerned that the current price does not give the physiotherapists enough incentive to produce a high volume of services. A proposal has been m
FORECASTING PROJECT The following table represents the demand for a product for the years 1990 to 2007: Year Quantity 1990 2753 1991 2634 1992 3169 1993 3301 1994 3754 1995 3834 1996 5117 1997 6448 1998 7908 1999 9213 2000 11502 2001 10791 2002 10022 2003 8342 2004 10453 2005 10784 2006 10718 2007 12460
A reduction in the demand for money is the equivalent of a(n) ______ in velocity and will shift the aggregate demand curve to the _______
Go to the internet auction site eBay at www.ebay.com and select the category Jewelry and Watches, followed by Loose Diamonds and Gemstones, and then Diamonds, Natural. How many natural diamonds are for sale at the moment? Note the wide array of sizes and prices of the diamonds. In what sense is there competition among the seller
Part A: The government decides to tax cookbooks because they feel that they encourage overeating and can lead to health issues, such as obesity and heart disease. Answer the following: in 600-800 words - What type of tax is this? Explain. - What happens to the supply of cookbooks? - What happens to the equilibrium price?
Describe what would happen if an outside agency determined the prices eBay could charge.
Shoes For Less (SFL) hires you to determine the demand for their shoes, and you estimate this to be: Qd = 32,000 - 1200P + 600Pc + 1.2Y + 0.06A where the independent variables are respectively: price of SFL's shoes, price of competitors' shoes, per capita income (in $) and advertising (in $) by SFL. You observe that compet
Please comment on the following statement: "A company could produce and sell any product as long as there is a market for it."
Starting with the estimated demand function for Chevrolet given in problem 2, assume that the average value of the independent variables changes to N=225 million, I= 12,000, PF=10,000, Pg=100 cents, A=250,000, and p1=0 (ie. The incentives are phased out). 3(a). Find the equation of the new demand curve for Chevrolets. 3(b).
Answer all questions, a through f. On questions c, d, e and f show your math. Suppose that the demand and supply functions for good X are as follows: QD = 75 + (.004)*M - 4*P QS = -43 - (.4)*(PI) + 3*P a. Is this good a normal good or an inferior good? How do we know? b. Is the sign correct on the coefficient in f
According to an article in the Wall street Journal, during 2006, the demand for full-size pickup trucks declined as a result of rising gas prices and a decline in housing construction (construction firms are an important part of the market for full-size pickup trucks). At the same time, Toyota began production of trucks at a new
Assume that the market demand and the market supply are governed by the following equations: Qd=80-4P Qs=6P (i) Is the demand consistent with the law of demand? (II) Is the supply consistent with the law of supply? (iii) What would be the equilibrium price and quantity in this market?
You are a CEO of Ace Widget Co. You are certain that the price elasticity of demand for your product is 1/2. Your chief economist tells you to increase your product's price. Do you follow his advice or fire him? Fully explain.
Calculate the profit maximizing price if MC is $8.00 and price elasticity of a firm's product equals -2.
Airlines practice price discrimination by charging leisure travelers and business travelers different prices. Different customers pay varying prices for essentially the same coach seat because some passengers qualify for discounts and others do not. Since the discounts are substantial in many cases, the customers who qualify f
Suppose the labor force decreases in size due to a large number of people reaching retirement age and subsequently entering retirement. At the same time real interest rates in the economy fall. What will happen in the economy? 1) Equilibrium price in the economy will rise, equilibrium quantity is ambiguous. 2) Equilibri
How would a low-cost price leader enforce its leadership through implied threats to a rival? Provide at least one example of such a strategy.
These are multiple choice for pretest and study purposes .Please provide feedback and the reason for the choice. Thank you
1. The Beaverdam Run Condominium Association has an office Xerox machine. Six months ago, the Association signed a one-year lease for the machine. Six monthly payments remain on the lease at $100 per month. The Association also pays a fee of $0.07 per copy and makes 2,000 copies per month. The lease terms state that cancella
Understanding how market equilibrium is maintained is essential for business managers. As a manager, it is important to understand how economic principles, and specifically supply and demand, are a part of your everyday business decisions. Explain the market equilibrating process and compare the demand for food with the de
Countries Home and Abroad have two factors of production, land and labour, with which they produce two goods, wheat and wine. Technology is the same in the two countries, characterized by constant returns to scale and strictly increasing production functions with decreasing marginal products. Wheat is land-intensive, wine is lab
You are given the following equation for the market demand function for product X: QD=500-20Px+0.002I-10Py Where QD=quantity of X demanded per year Px=price per unit of product X I=average income per year Py=price per unit of product Y a) Is X a superior (normal), neutral or inferior good? Why? b) Is Y a substitute f
A monopolistic firm operates in the U.S. No trade is possible between the NY market and the LA market. The firm has calculated the demand functions for each market as follows: NY Market Pn = 150 - Qn LA Market Pl = 50 - Ql The company estimates its total cost function to be: TC = 40Q. Calculate the following: a. qua
If the demand for soda in a vending machine is represented by the equation Qd=120-40P, what is the price elasticity of demand if the price changes from 1.1 to 2.3? (Hint: you will first need to find the quantity purchased at the two different prices.)
Why do you suppose firms tend not to change their prices immediately in response to changing demand and supply conditions? Does this have anything to do with the market structure that the firms operate in? Does it have anything to do with the global economy? Excess capacity? Current economic conditions?
Please help with the following problem. Provide at least 300 words in the solution. Why are economists against the notion of Congress having more power over the Federal Reserve?
What are the pros and cons of conducting an experimental versus an observational study? What are examples of these studies? Can both types of studies be used for all projects? Explain why or why not.
Would you propose and increase in taxes (to raise revenues) or a decrease in spending (to reduce expenditure) to address a deficit?