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Economics - Price and Total Revenue

The Portland Sea Dogs, the AA affiliate of the Boston Red Sox major league baseball team, have enjoyed a surge in popularity. During a recent home stand, suppose the club offered $5 off the $12 regular price of reserved seats, and sales spurted from 3,200 to 5,200 tickets per game. A.Derive the function that describes the pri

Fed fund rates / history from 2001-2005

Using the website for the St Louis Federal Reserve Look at the Federal reserve rate monthly data from 2001 to 2005 What has happened to the interest rate from 2001 to 2005? Why has this occurred? Look at the consumer prices (personal consumption expenditures - less food and energy And gross domestic product ("1 decimal") fi

impact on immediate GDP

C = 500 + 0.8 Y, I = 400, G = 400, (X - M) = -100 Solve for GDP. What would be the impact on GDP if the government spending increased to 500? Why would the increase in GDP be greater than the increase of a $100 increase in government spending?

AD Schedule

True or false and explain. "The AD schedule slopes downward because real income rises as the price level declines and everybody buys more as their real income rises."

Ability to Develop and Commercialize Innovative Products

Which best supports the reason for why the use of teams by Anacorp Corp. is considered critical to its ability to develop and commercialize innovative products? a. Teams composed of professions with diverse backgrounds enable the company to benefit from the use of dispersed knowledge. b. Team decision making co

Government Cuts Its Purchases

Assume the government cuts its purchases by $120 billion. As a result, the budget deficit is reduced by $40 billion, private domestic decreases by $10 billion, disposable personal income decrease by $80 billion and the trade deficit is reduced by $15 billion. By how much has national income (y) changed?

Economic Argument on Smoking

1. A pack of cigarettes a day adds up to $1190 a year on average; it's more in states that have higher taxes on tobacco. Calculate what you or a loved one spends using a smoker's calculator. 2. The article states that the yearly cost of smoking a pack of cigarettes a day is $1190. Find the average cost of a pack of cigarettes

R-Square Value

R2 is a statistical measure which: a) determines how important one variable is in explaining the value of another variable b) tests the true value of a variable c) determines how well an equation can estimate the relationship between one variable and a set of other variables d) all of the above e) none of the above Whi

Two-part tariffs and underage drinkers

The Rusty Anchor Bar has 2 types of patrons: legal and underage drinkers. Even though it is illegal to allow entry to underage drinkers, there is no perfect way to identify underage drinkers since they often use fake identification cards. The penalty for serving underage drinkers is severe - the bar could lose its license. Ass

Price Individual Demands

Two consumers, Consumer 1 and Consumer 2, purchase the same product. They have the following demand curves: Q1 = 500 - 10 P and Q2 = 500 - 20 P. MC for the firm is $10. (a) Calculate the prices that should be charged to each customer if the seller is able to use first degree price discrimination. (b) Is this a good

Net Marginal Revenue

A firm should increase advertising if the net marginal revenue derived is: equal to the marginal cost of advertising. greater than the marginal cost of advertising. greater than zero. less than the marginal cost of advertising.

Factors that Drive Fluctuations in Market Prices

If you were to pick the single most important factor that drives the fluctuation in the short term stock market prices, what would that factor be, and why do you think that it is the chief factor that drives short term fluctuations?

Economics - Cost Function

High-Low Method Manchester Foundry produced 45,000 tons of steel in March at a cost of $1,150,000. In April, the foundry produced 35,000 tons at a cost of $950,000. Using only these two data points, determine the cost function for Manchester.

Computing marginal propensity to consume

A country's disposable personal income in 2004 was $100 billion, and $80 billion of that was used as consumption. What is the country's marginal propensity to consume (mpc), which is expressed by the ratio of consumption to income?

Economics: Determining Perceived Value

How do people judge whether prices are too low, too high or fair? As a consumer how do you determine perceived value? What factors do you consider when decided to purchase a product from one company versus another company? How do you determine perceived value when deciding to purchase a service from one company versus anothe

Profitability Index Project

Year Project A Project B 0 -$200 -200 1 82 100 2 80 100 3 80 100 4 80 Question 6: Profitability Index - If the opportunity cost of capital is 11 percent, what is the profitability index for each project? Does the profitability index rank the project incorrectly?

Opportunity cost (macroeconomics)

Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fresh fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced. Obviously, given their limited resources and available technology, as they use more of their resources

Positive and Negative Event

Can you pick one positive and one negative example of events in your area, the state, the country or the world that might impact our life, careers or professions. Please explain the impact and how you might deal with the consequences of each event. Thank you

Firms in a Oligopolistic industry

Consider two strategically dependent firms in an oligopolistic industry: Firm A and Firm B. Firm A knows that if it offers extended warranties on its products but Firm B does not, it will earn $6 million in profits, and Firm B will earn $2 million. Likewise, Firm B knows that if it offers extended warranties but Firm A does not,

American Managers and ethical decline in the US

Do you believe that there are certain common characteristics or traits of American managers that have led to moral or ethical decline in US business over recent years and thus business scandals? If so, what are these characteristics and why do you think they are prevalent in US business and not other countries' business culture

Monoploy and Monopolistic Competition

If the Rhine Company ignores the possibility that other firms may enter its market, it should set a price of $10,000 for its product, which is a power tool. But, if it does so, other firms will begin to enter the market. During the next two years, it will earn $4 million per year, but in the following the next two years, it wi

Calculating Price Index for text books

Eastland College is concerned about the rising price of textbooks that students must purchase. To better identify the increase in the price of textbooks, the dean asks you, the Economics Department's star student, to create an index of textbook prices. The average student purchases three English, two math, and four economics

Economics - Maximum Profit Problem

A steel producer has the following total cost: TC = $187,500 + $5Q + $0.0003Q^2. Q = tons of steel produced per month. Calculate the firm's maximum profit if steel price is stable at $20 ton.

Third degree price discrimination - senior citizen versus. rest

A movie theater has estimated that the demand for a movie ticket can be written as P1 = 10 - Q1 for senior citizens and P2 = 12 - Q2 for the rest of the customers. The marginal cost of a movie ticket is $1. If the movie theater practices third-degree price discrimination, what prices will be charged? A. Senior citizens pay $

Two part pricing - annual membership and rental

A local surf store estimates that their average customer's demand per year is P = 3.5 - 0.5Q, and knows that the marginal cost of each rental is $0.5. a- How much should the store charge for an annual membership in order to extract all the consumer surplus using an optimal two-part pricing strategy? b- How much should t

Demand Analysis & Estimation - Optimal Pricing - Oaktown

In effort to reduce excess end-of-the-model-year inventory, Oaktown Ford offered a 1% discount off the average price of 4WD Escape gas-electric hybrid SUV's sold during the month of August. The response was wildly enthusiastic, with unit sales rising by 10% over the previous month's level. 1) Calculate the point price elastic

Income Elasticity for Staple Foods

The income elasticity for most staple foods, such as wheat, is known to be between zero and one. a. As incomes rise over time, what will happen to the demand for wheat? b. What will happen to the quantity of wheat purchased by consumers? c. What will happen to the percentage of their budgets that consumers spend on wheat?


When a firm is able to set its price, its price will always be less than its MR. Is this true or false and why??