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# Microeconomics

### Common Resources in a Competitive Market

Mark and Susan lives next door, and they plan to hire a security guard. The cost for a guard is \$50 for Mark, \$150 for Susan. Whoever pays the wage, this guard will guard both houses. How much wage can a guard ask for a maximum while being hired at least to one of them? If the wage for the guard is \$120 in the competitive market

### Calculating total revenue and marginal revenue from a demand function

A firm's demand function is defined as Q = 14 - 2P. a) Use this function to calculate total revenue when price is equal to 3 and when price is equal to 4. b) What is marginal revenue equal to between P=\$3 and P=\$4?

### Managerial Economics: To Rent or to Own

You currently pay \$10,000 per year in rent to a landlord for a \$100,000 house. You can qualify for a loan of \$80,000 at 9% if you put \$20,000 down but you would have to liquidate stock earning a 15% return. What is better? To rent or own?

### Creating a Revenue Equation

Assume that a demand equation is given by x=5,000-10p. Find the marginal Revue for the given production levels (values of x). (Hint: Solve the demand equation for p and use R(x)=xp). 1000 units 2500 units 3000 units. See the attached file.

### Microeconomics: Utility Maximization

I need help with the problem below. Please explain in detail. Thank you. Suppose Bob spends his income (I) solely on goods X and Y. Initially, Bob has \$1000/week to spend on consumption and the prices of these goods are Px=\$4 and Py=\$2. Graph the budget constraint for this problem. Given these prices and income, Bob maximi

### Two Good Utility Maximization

Two goods are consumed with respective price p_x and p_y. The utility function is given by u(x,y) = Min {2x + y, 2y} Income is 84 Suppose p_x = 3 and p_y = 2 How do I derive the optimal bundle/utility maximizing problem?

### Calculate the interest rate for a simple loan.

Suppose that a relative agrees to loan you \$1,000 today, with the promise that you will repay the loan with interest after one year. If you pay \$1,120 at the end of the year, what is the interest rate for this simple loan?

### Marginal analysis: Should Read No Evil (RNE) purchase an industrial shredder?

Read No Evil (RNE) is a firm specializing in the destruction of sensitive documents. An industrial paper shredder costs \$10,000. If bought, it would raise RNE's revenues by an additional \$1,000 per year. The machine will last forever and never require maintenance. Which of the following statements is true? A. RNE shou

### Complete the following table for the firm below which is selling its product in a perfectly competitive market and hiring labor in a perfectly competitive labor market. State how many workers the firm will hire at various wages. Explain.

Complete the following table for the firm below which is selling its product in a perfectly competitive market and hiring labor in a perfectly competitive labor market. State how many workers the firm will hire at various wages. Explain. TP = Total Product MP = Marginal Product MRP = Marginal Revenue Product

### Linear Program Modeling: Case Study on Pine Furniture Company

The Pine Furniture Company makes fine country furniture. The company's current product lines consist of end tables, coffee tables, and dining room tables. The production of each of these tables requires 8, 15, and 80 pounds of pine wood, respectively. The tables are handmade and require one hour, two hours, and four hours. Each

### Walmart Company Analysis

- Have there been any complaints (legal, consumer employee) against Walmart? - What does Walmart specialize in? - Where does Walmart make its products?

### Pricing Strategies Based On Marginal Cost Increase

You manage a company that competes in an industry that is comprised of five equal-sized firms that produce similar products. A recent industry report indicates that the market is fairlysaturated, in that a 10 percent industry-wide price increase would lead to a 22 percent decline in units sold by all firms in the industry. Curre

### Global Manager: Dynamic Pricing

What company would you choose and explain how the company you have chosen uses dynamic pricing. What are the benefits and drawbacks of dynamic pricing for the company. Conclude with a summary of your findings.

### Tax Rates: Proportional, Progressive, Regressive

Suppose a special tax was introduced that used the value of one's automobile as the tax base. Each person would pay taxes equal to 10 percent of the value of his or her car. Would the tax be proportional, progressive, or regressive? What assumptions do you make in answering this question? Do you think the tax that was imposed ei

### Industry supply curve

The short-run industry supply curve for a perfectly competitive industry is the ? a) horizontal sum of the individual firms'marginal cost curves above AVC. b) vertical sum of the individual firms'marginal cost curves above AVC. c) horizontal sum of the individual firms'marginal cost curves above ATC. d) vertical sum of the

### Supply Curve

Consider the relationship given by QCars = 100 + 4xPCars - 2xPSteel - .2xPWorkers, where is the quantity of cars (in thousands), is the price of cars and P is the wage earned by autoworkers. If the price of steel is \$10 per unit and the price of workers (the wage) is \$20, what is the supply curve for cars?

### The South African firm, De Beers, and branding

The South African firm De Beers was responsible for the well known ad line "A Diamond is forever." Notably, the firm's advertisements never mentioned the De Beers brand name. Why would only a near monopolist such as De Beers omit its name?

### HHI Index

Determine whether the Justice Department would challenge a merger between two firms in an industry with 10 equalized firms, based on the Herfindhal index guidelines. (No other factor considered)

### Plot this student's production possibilities curve (PPC)

Please help with the following questions. Does the PPC illustrate increasing or decreasing opportunity cost? What is the opportunity cost for this student for the additional amount of study time on economics required to mover her grade form 60 to 70? What is the opportunity cost for this student for the additional am

### Advertising influences on consumption decisions

*Time for an honest moment here, stop and think about how much advertising influences your consumption decisions. When is the last time you can remember choosing one product over another because of advertising?

### Why are some ethnic and racial groups more successful

Why are some ethnic and racial groups more successful than others in improving their economic and social positions?

### Merger discussion

15. Nationwide Bank has approached Hometown Bank with a proposal to merge. The following table lists the sales of the banks in the area. Use this information to calculate the four-firm concentration ratio and the Herfindahl-Hirschman index. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, do you thi

### Ethics of using unconscious nudges to alter people's behaviors

In your opinion do you think it is ethical of using unconscious nudges to alter people's behavior. Within your answer, consider the argument made by economists Richard Thaler and Cass Sunstein, who favor the use of nudges. Could nudges be avoided? Do all policies contain some unconscious nudges and incentives? Do all nudges infl

### Discuss the Value of Marketable Emission Credits

Explain why economists believe that marketable emission credits add to overall economic efficiency. Other groups in our society prefer across-the-board limitations on maximum discharges of air pollutants by firms. What are the different goals of these two groups? How are voters to decide which path to follow?

### Moving Average Approach and Exponential Smoothing approach

Explain the difference between the Moving Average approach and Exponential Smoothing approach to forecasting.

### Solve for Optimal mix.

Brian is taking three courses this semester: economics, statistics, and finance. He has decided to spend 19 hours per week studying (in addition to attending all his classes) and his objective is to maximize his average grade, which means maximizing the total of his grades in the three courses. The table shows Brianâ??s estimat

### Maximizing Potato Field Profits Using Marginal Analysis

Doug's farm in Idaho has four major fields that he uses to grow potatoes. The productivity of each field follows: ___________ANNUAL YIELD, HUNDREDS OF POUNDS___ Field 1 10,000 Field 2 8,000 Field 3 5,000 Field 4 3,000 Assume that each field is the same size and that the variable costs of farming are \$25,0

### Movie theatre policy to implement to increase total revenue

Suppose the price elasticity of demand for movies by teenagers is 0.2 and that by adults is 2.0. What policy would the movie theatre implement to increase total revenue? Make up some data to illustrate your answer

### Substitution and income effects for a college student

Kamika lives in Chicago but goes to school in Tucson, Arizona. For the last 2 years, she has made four trips home each year. This year, the price of a round-trip ticket from Chicago to Tuckson increased from \$350 to \$600. As a result, Kamika decided not to buy a new outfit this year and decided not to drive to Phoenix with frien

### Profit function for a small business

I have financial statements for a small business. How does one generate a profit function based on those financial statements?