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How consumer demand responds to tax cuts

Suppose you notice that a $7 billion tax-cut was accompanied by a $9 billion increase in consumer spending in the same year. How would you explain why consumer spending increased by more than the tax-cut?

HHI Index

Suppose there are 12 firms in an industry. The percentage of total sales is given in the following table: Firm Percentage of total sales 1 16 2 14 3 12 4 12 5 10 6 8 7 6 8 6 9 5 10 4 11 4 12 3 Calcula

Total Profit and Price Charges

Consolidated Salt Company sells table salt to both retail grocery chains and commercial users (e.g., bakeries, snack food makers, etc.). The demand function for each of these markets is: Retail grocery chains: P1 = 180 - 8Q1 Commercial users: P2 = 100 - 4Q2 where P1 and P2 are the prices charged and Q1 and Q2 are the quan

Break-even income: Example questions

Show the consumption and saving schedules graphically. Determine the APC and APS for each level of income. Now, determine the MPC and MPS for each change in the income level. Locate the break-even point. How is it possible for households to dissave low income levels? If the proportion of total income that is consumed decreases

Effects of the appreciation of the Canadian dollar against the US dollars

Please advise if my answers are correct. I think I am weak in part d. Question In 2003 to 2004, the Canadian dollar appreciated against the US dollar. Explain the effects of this appreciation on a. Canadian importers of goods from the US. (2 marks) b. Canadian firms that sell commodities to US buyers. (2 marks)

Consumer Lock-In and Network Externalities

For each of the following products, could consumer lock-in or network externalities (or both) create a barrier to entry? Explain why or why not. a. Toothbrush b. DVD's c. Video games

Managerial Economics

Igh grade. The standard CDs are used primarily in computer drives and are designed for data storage rather than accurate sound reproduction. The company only recently began producing the higher quality, high grade model to enter the lucrative music recording market. Since the new product was introduced, profits have seen only a

Calculate the Size of Rebate that Maximizes Total Profits

I have a website where I offer cash rebates for buying stuff. For instance, if someone purchases a pair of shoes, I give them a $10 cash rebate. For that particular sale I will receive a commission of say, $25, so my net revenue from that offer is $15. The goal is to offer a rebate that is large enough that lots of people are in

Total Cost

Suppose total benefits and total costs are given by B(Y) = 100Y - 8Y2 and C(Y) = 10Y2. What level of Y will yield the maximum net benefits? Show your work. a. 75/36 b. 75/18 c. 50/18 d. 100/36

Economics class

Suppose you were having lunch with your best friend who just enrolled in an economics class. He was complaining about how irrelevant the class was, commenting that he saw no useful purpose for economics. According to your friend, "I'm a nursing major. I will never use this stuff in the real world." Having just completed the same

Calculating Marginal Revenue Product: Acquiring Resources

Using the information in the following table, calculate the marginal revenue product (MRP = MPP x MR) (see attachment for table). MPP = change in output/change in resource MR = change in revenue/change in quantity The number of units of resources the firm will want to acquire? Please see

Macroeconomics Multiplier

The economy is in equilibrium at $9.5 trillion dollars, the MPC is .70, and the simple government multiplier is operative. If consumption is raised by $300 billion dollars, what is the maximum change in Real GDP and the new equilibrium point?

Standard Costs and Balanced Scorecard

Dinkel Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2008. Costs and Production Data Actual Standard Raw materials unit cost $2.25 $2.00 Raw materials units used 10,600 10,000 Direct labor payroll $122,400 $120,000 Direct labor hours worked

Marginal propensity

A firm purchases a new computer system for $1M. If the marginal propensity to consume is 0.8, the final change in national income will be a. $800,000 b. $1M c. $1.2M d. $4M e. $5M Which answer is correct, can you explain

Continuous and Discrete Data

What are some differences between continuous and discrete data? Can you give some examples of each from your industry?

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.