Answer the following questions on the basis of three sets of data for the country of North Vaudeville: a. Which set of data illustrates aggregate supply in the immediate short-run in North Vaudeville? The short run? The long run? b. Assuming no change in hours of work, if real output per hour of work increases by 10 percen
The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado S
(Coffee Pricing Agreement Dissolves amidst Dilemma) When coffee bean harvest is larger than projected, the top Colombia and Brazilian coffee producers along with several African and Central American smaller producers often agree in principle to withhold millions of tons of coffee beans from the market in an effort to raise c
1- State whether the following characteristics represent monopolistic competition, oligopoly or both. a. Many sellers b. Mutually interdependent decisions c. Differentiated products d. Few sellers f. Easy long-run entry and exit 2- Six firms in the pet grooming industry in a city have the following m
Policy Associates, Inc. (PA) is a policy analysis firm that produces policy reports hiring analysts who scrutinize datasets. Its production function is : Q(D,L)=(0.10)D^(1/2)L^(3/4) Where Q is the number of policy reports it produces, L is the number of policy analysts it hires, and D is the number of datasets purchased.
Using the following example, allocate service center costs to each of the three revenue centers using the step-down method: Full-time
When Burger Barn hires one worker, 20 customers can be served in an hour. When Burger Barn hires two workers, 50 customers can be served in an hour. The marginal product of the second worker is _______ customers served per hour. a) 15 b) 30 c) 20 d) 25 Suppose that in 1999 ABC Corp produced 500 million units of a
MicroChips Corp has enjoyed substantial economic profits derived from patients covering a wide range of inventions and innovations for microprocessors used in high performance desktop computers. A recent introduction, the Penultimate has proven especially profitable. Market demand and marginal revenue relations for the product are as follows: P=$5,500-$0.005Q MR=change TR/changeQ=$5,500-$0.01Q Fix cost are nil because research and development expenses have been fully amortized during previous periods. Average variable cost are constant at $4,500 per unit. A.Calculate the profit-maximizing price output combination and economic profits if Microchips enjoys an effective monopoly because of patent protection. B. Calculate the price-ouptut combination and total economic profits that would result if competitors offer clones that make the market perfectly competitive.
MicroChips Corp has enjoyed substantial economic profits derived from patients covering a wide range of inventions and innovations for microprocessors used in high performance desktop computers. A recent introduction, the Penultimate has proven especially profitable. Market demand and marginal revenue relations for the product a
Consider a sharecropper whose contract calls for him to receive ¾ of the output produced in the farm on which he works. Suppose that the value of the marginal product of labor on the shared cropped land is given by 80-L. Where L stands for hours of work . The alternative wage that he can receive elsewhere is 40 rupees. Assume t
Mark Price Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 160,000 Purchases (gross) 640,000 Freight-in 30,000 Sales 1,000,000 Sales returns 70,000 Purchase discounts 12,000 Instructions (a) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales. (b) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of cost.
Mark Price Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 160,000 Purchases (gross) 640,000 Freight-in 30,000 Sales 1,000,000 Sal
A high-end lamp monopolist operates in the Mid-West where the demand for lamps is given by Q1=200-P1. Producing one lamp costs 10 per unit. (a) Derive the profit maximizing price and the profits at this price. (b)What is the demand elasticity at this price? Suppose now that the monopolist has the opportunity to expand
Refer to the file for full details.
1. What is the law of diminishing returns? Can you give an example of when diminishing returns have set in (could set in) at a work place? 2. What is the difference between economic profits and accounting profits? Can you give examples of costs (opportunity or explicit) you think your firm overlooks/might overlook when it
Complete table Number of Workers Total Output (Total Product) Marginal Product of Labor Average Product of Labor 1 12 12 12 2 14 3 42 4 14 5 13.6 6 10 7 84 8 4 9 10 10 1 11 91 a. At what point (in terms of workers) do we see evidence of diminishing marginal product? b. Is the slope of the
Indicate the effect that each of the following conditions will have on a firm's average variable cost curve and its average total cost curve. a. The movement of a brokerage firm's administrative offices from New York City to New Jersey, where the average rental cost is lower. b. The use of two shifts instead of three shift
Introduction: Based on the pricing and output decisions in the short run, firms in Perfect competition, Monopoly, and Monopolistic competition show an ability to earn abnormal profits. However, it is observed that in the long run, these firms are able to earn only normal profits. Task: Do you agree with the statement above? A
1. The original revenue function for the microchip producer is R=170Q-20Q2. Derive the expression for marginal revenue, and use it to find the output level at which revenue is maximized. Confirm that this is greater than the firm's profit-maximizing output, and explain why. 2. Suppose a firm's inverse demand curve is given b
Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $250. Her variable costs are $1000 for the first thousand posters, $800 for the second thousand, and then $750 for each additional thousand posters (Total, 50 poin
If government wanted to encourage a monopoly to produce the socially efficient quantity, should it use a per-unit tax or per-unit subsidy? Explain how this tax or subsidy would achieve the socially efficient level of output. Among the various interested parties - the monopoly firm, the monopoly's consumers, and other taxpayers -
Analyze the following scenario: Meals for the Homeless buys 30,000 large cans of green beans each year. The cost of each can of beans is $4. The cost to place an order for beans, including the time of the employee placing the order, shipping, and so forth, comes to $20 per order. The out-of-pocket carrying costs (for storage, et
Each instance that follows is an example of one of the four types of market failure (imperfect market structure; the existence of public goods; the presence of external costs and benefits; and imperfect information). In each case, identify the type of market failure and defend your choice briefly. a. An auto repair shop convi
Analyze the following scenario: Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,200,000 if purchased today and will generate the following cash disbursements and receipts. Should Duncombe pursue the investment if the cost of capital is 8 percent? Why? Clearly label calculations in anal
For cases A through F in the following table, would you (1) operate or shut down in the short run and (2) expand your plant or exit the industry in the long run? A B C D E F Total revenue 1,500 2,000 2,000 5,000 5,000 5,000 Total cost
I need help calculating nominal GPA for year 4 and Real GDP for year 5. Units of Price Year Output Per Unit 1 3 3 2 4 4 3 6 5 4 7 7 5 8
1. What is the difference between explicit and implicit costs? Which of the costs is most closely associated with opportunity costs and why? 2. State and explain the law of diminishing returns. How does this law apply to a typical day at work or at school? (Or, if you could imagine, taking an on line microeconomics course).
You are the manager of a paper mill and have been subpoenaed to appear before a joint session of the Senate Consumer Affairs and the Senate Environmental subcommittees. The Consumer Affairs Subcommittee is interested in your testimony about the pricing practices of your company because a recent news magazine reported that your
Consider the following scenario to understand relationship between marginal and average values. Suppose Tim is a professional basketball player, and his game log for free throws can be summarized in the table below. Fill in the columns to show Tim's free-throw percentage for each game and overall free-throw average. Game
ABC Comnpany is considering a proposal to open new stores throughout the U.S. In 2012. They plan to initially open 100 of these in 2012, and then each year thereafter open 25% more than the previous year. (It is acceptable that in some years, fractions of centers would be opened.) Each store will cost $150,000 and will resul
Hi, You are the manger of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1's elasticity of demand is -2, while group 2's elasticity of demand is -6. Your marginal cost of producing the product is $10. a) Determine your optimal markups and prices under third degree price
The Federal Trade Commission seeks to ensure that the process of bringing new low-cost generic alternatives to the marketplace and into the hands of consumers is not impeded in ways that re anticompetitive. To illustrate the potential for economic profits from delaying generic drug competition for one year, consider cost and dem