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Decreasing Returns to Scale in the Long Run

In the long run, a firm is said to be experiencing decreasing returns to scale if a 10 percent increase in inputs results in: an increase in output from 100 to 110. a decrease in output from 100 to 90. an increase in output from 100 to 105. a decrease in output from 100 to 85.

Function of a Perfect Substitution of Two Inputs

The perfect substitution of two inputs implies that two inputs can be substituted at a ratio of 1 to 1. one input can be substituted for another up to some point. two inputs can be substituted at some constant ratio. one input can be substituted for another.

Defining Business Risk

____________ risk involves variation in returns due to the ups and downs of the economy, the industry and the firm. structural fluctuational business financial

Monopolist in publishing a textbook on Hong Kong economy.

3. SAR Publisher is a monopolist in publishing a textbook on Hong Kong economy. Besides the Hong Kong market, SAR Publisher also sells this textbook in the US. Suppose SAR Publisher can produce this textbook at a constant marginal cost of $20 per copy and the demand curves for the two markets are given by: QUS = 48, 000 - 600PU

Open & closed economies

1. A open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. What is marginal propensity to save of this economy? *It looks as though enough information has not been provided.* 2. A open economy has a marginal propensity to import (MPI) equal to 0.2 and a margina

Supply Chain Inventory Management Question

Give an personal example of a reverse logistics system you've experienced as a consumer. Were you satisfied with the cycle time of the process and what steps did the company take to guarantee your satisfaction. Finally, answer the question as to whether you are more likely to quit patronizing a company because of their reverse o

Opportunity cost for production

Let's say, country A and country B both consume and produce only food and clothing. Both countries use only labor to produce these two products. A worker in country A can produce 6 units of clothing or 10 units of food each day while a worker in country B can produce 4 units of clothing or 8 units of food. Would opportunity


A bookstore opens across the street from the University Book Store (UBS). The new store carries the same textbooks but offers a price 30 % lower than UBS. If the cross-elasticity is estimated to be 1.5, and UBS does not respond to its competition, how much of its sales is it going to lose?

Economics Question

I need help with this question. I think the customer will carry the burden but not sure. I believe the answer has something to do with elasticity as well. Not sure how to tie it all together. Question: Who would bear the brunt of a national sales tax on tobacco products? Why?

Calculating Quantity Demanded and Determining Demand Curve

Gurgling Springs, Inc., is a bottler of natural spring, Inc. is a bottler of natural springs water distributed throughout the New England states. Five-gallon containers of GSI spring water are regionally promoted and distributed through grocery chains. Operating experience during the past year suggests the following demand fun

Source Bias

New source bias can exist for stationary sources. Discuss why this bias leads to a solution that is not cost effective. What policies might eliminate this bias?

Demand Curve

The demand by senior citizens for showings at a local movie house has a constant price elasticity equal to - 4. The demand curve for all other patrons has a constant price elasticity equal to - 2. If the marginal cost per patron is $1 per showing, how much should the theatre charge members of each group?


1. Resources are A. scarce for households but plentiful for economies. B. plentiful for households but scarce for economies. C. scarce for households and scarce for economies. D. plentiful for households and plentiful for economies. 25. Ben bakes bread and Shawna knits sweaters. Ben likes to eat bread and wear swea

Change in Real Cost

Suppose industry abatement costs rise from $850 million in 2004 to $1,000 million in 2005 in nominal terms and that the CPI is 100 in 2004 and 106 in 2005. a. Evaluate the change in costs over the period in real terms, first in 2004 dollars and them in 2005 dollars. b. Are your answers the same? Explain why or why not.

profit-maximizing price inverse

Suppose a typical consumer's inverse demand function for bottled water at a resort area where one firm owns all the rights to a local spring is given by P = 15 - 3Q. The marginal cost for gathering and bottling the water is $3/gal. Find the optimal number of bottles to package together for sale and the profit-maximizing pric

Linear Programming

Graphically solve the following problems Maximize Profit Z= $4X1+$6X2 Subject to 1X1+2X2 ≤ 8 6X1+4X2 ≤ 24 a). What is the optimal solution? b) If the first constraint is altered to 1X1+3X2 ≤ 8, does the feasible region or the optimal solution change? See attached file for full problem descri

Marginal Product of Labor: Example Problem

If the price of capital is $24, the price of labor is $15, and the marginal product of capital is 16, the least costly combination of capital and labor requires that the marginal product of labor be ________.


Which of the following combination of inputs is most closely reflective of decreasing marginal rate of technical substitution (MRTS)? a. oil and natural gas b. sugar and high fructose corn syrup c. computers and clerks d. keyboards and computers Which of the following is the best example of two inputs that would

Changes in aggregate expenditures

This problem was changed from calculating aggregate demand to calculating the changes in aggregate expenditures. I thought with aggregate expenditures, knowing the MPC is useless information unless we are going to calculate the new, equilibrium GDP. I am stumped and would appreciate any insight. -Assume that a hypothetical

Point Elasticity

3. The demand equation for a product is given by P =30 - 0.1Q² a. Write an equation for the point elasticity as a function of quantity. b. At what price is demand unitary elastic?

Graph the MSB and MSC functions

It is well documented that the carbon monoxide (CO) emissions from combustible engines increase in colder climates. This implies that the associated damages are expected to be less severe in summer months than in winter. Nonetheless, air quality control authorities use a standard for CO that is uniform throughout the year with

Coase Theorem

One of the major problems in applying the Coase Theorem in practice is the existence of high transactions costs. Propose an approach that a third party could use that would reduce these costs sufficiently so that bargaining could proceed. How likely is the solution to be efficient and why?