Chapter 11
1) What is the difference between the short run and the long run?
2) What is the law of diminishing returns? Why is this proposition called a "law"?
3) What are the two components of a firm's total cost in the short run, and what are their definitions?
4) What is the difference between average total cost and marginal cost and are they ever equal to each other?
In: Economics
n 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. According to the textbook, which of the following statements is (are) correct?
(x)One goal of the tax was to prevent rich people from buying luxuries.
(y)One goal of the tax was to raise revenue from those who could most easily afford to pay the tax.
(z)The burden of a luxury tax usually falls more on the middle class worker that produces the good than on the wealthy buyer because demand for luxury goods is usually price elastic.
A.(x), (y) and (z)B. (x) and (y) only C.(x) and (z) onlyD.(y) and (z) onlyE.(x) only
In: Economics
In: Economics
Suppose there are two inputs in the production function, labor and capital, and
these two inputs are perfect substitutes. The existing technology permits 3 machines to do the work of 2
worker. So F(E,K)=2K+3E. The firm wants to produce 60 units of output. Suppose the price of capital is
$10 per machine per hour. What combination of inputs will the firm use if the wage rate is $10 or $15 or
$20 per hour? What if the firm wants to produce 90 units of the output?
In: Economics
(Attributes) Competitive Market Monopolistically Competitive Market
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Price is equal to marginal revenue
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Product Differentiation
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Many Sellers
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Free Entry
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Complete the table by indicating if each attribute characterizes a competitive market, a monopolistically competitive market, both, or neither. Check all that apply.
Please! Respond in a way that is easy to understand and organize it just the way i have shown above.
In: Economics
If a project costs $70,000 and is expected to return $17,500 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i=16%? Assume that the cash flows occur continuously throughout the year.
In: Economics
Could a state society exist without stratification and without violence? (Include evidence!)
In: Economics
In: Economics
Please utilize well-executed, clearly constructed one graph for showing responses to all questions. You do not have to reproduce the graph for each question. Please remember to: · Label all axes (P, Q) · Label all lines/curves (Demand, Supply) · Label all relevant equilibrium points · Label intercepts for your linear demand and supply. (Intercepts are the points where the lines intersect the axes. For example, if a demand curve intersects the price axis at P=100, indicating that at P=100, 0 units are purchased, you should label that point on the axis with the price of 100).
Question 1 Suppose you have been hired by a research firm trying to understand the market for Widgets (a hypothetical product). Your analysis of the data indicates that the Demand curve for Widgets is estimated to be linear and given by equation Qd = 100 - 2P and the Supply curve for Widgets appears to be linear as well and is estimated as Qs = 2P - 20. Graphically draw these two curves, labeling all relevant points (such as intercepts for each line) on the horizontal and vertical axes.
Question 2 Given that Demand is Qd = 100 - 2P and Supply is Qs = 2P - 20, your next assignment is to compute the equilibrium Price and Quantity in the market for Widgets. Indicate these values on the graph.
Question 3 The firm that hired you has estimated that improvements in Widget quality tastes will cause the Demand curve to change to Qd = 140 - 2P. If the Supply curve remains the same (Qs = 2P - 20), graphically draw these two curves, labeling all relevant points on the horizontal and vertical axes.
Question 4 Given that New Demand is Qd = 140 - 2P and Supply is Qs = 2P - 20, your next assignment is to compute the new equilibrium Price and Quantity in the market for Widgets. Indicate these values on the graph.
In: Economics
Mario works part-time at a Pizza Hit and earns an annual wage plus tips of $15,000. He sold 4,000 pizzas during the year at $15.00 each. He was unemployed part of the year, so he received unemployment compensation of $3,000. During the past year, Mario bought a used car for $5,000. Using the expenditure approach, how much has Mario contributed to GDP?
In: Economics
30. What does an economy need in order to keep prices low, offer consumers a wide variety of choices, and encourage innovation?
A) The
implementation of communism and heavy government
regulation
B) The implementation
of socialism and give the poor a basic universal
income
C) Encourage the use of competitive markets, flexible prices, private property rights, respect for contract law, and individual liberty
D) Encourage fairness, social justice, eliminate income inequality, and regulate all personal income to make sure everyone gets the same amount.
In: Economics
As director of human resources you have collected data on college major and commuting time (in minutes) between home and work from 20 employees. Your sample information is given in the table below.
Employee College Major Commuting
Time
1 English 75.0
2 Math/Physics 34.2
3 Psychology 20.8
4 Economics 59.5
5 Economics 15.1
6 Math/Physics 43.3
7 English 37.9
8 Math/Physics 62.0
9 Psychology 18.6
10 Economics 16.1
11 Psychology 51.9
12 Psychology 8.0
13 Math/Physics 34.2
14 Economics 30.1
15 Math/Physics 28.7
16 Math/Physics 42.4
17 English 18.9
18 Psychology 26.0
19 Economics 14.1
20 Economics 30.5
5. Calculate the range of Commuting Time in your sample.
-Using the rule-of-thumb discussed in the learning area, how many bins do you propose to use for grouping Commuting Time?
-Create and fill in a table with columns for (1) bin, (2) absolute frequency, and (3) relative frequency.
-Draw a histogram of the relative frequency distribution of Commuting Time in your sample. How would you characterize the shape of your histogram (e.g. uniform, symmetric, etc.)?
In: Economics
explain how an indifference curve with constant marginal rate of substitution (e.i. good x and good y are perfect substitutes) will lead to the consumer purchasing only good x and good y. under what practical condition would the consumer only purchasing good x good y. draw a diagram and solution
In: Economics
Situation: Suppose a large portion (approximately 20%)
of the United States decides that the COVID-19 epidemic is a sign
of the coming apocalypse within the month (assume they are wrong).
Approximately half of this group decides to spend all their wealth
on doomsday preparation and charitable acts. The other half of this
group decides that the world is doomed, there is no hope of
fighting it and decides to party and have as much fun as possible
for the next month.
1. Using words (and math if you’d like) describe the macroeconomic
impacts of these groups’ actions. What will be the impact on total,
consumption, and investment spending, net exports, and the price
level? Will interest rates be affected? If so, how?
2. Graph the changes described in your answer to question 1. Use
all appropriate graphs in your answer (AD-AS, Supply and Demand,
Loanable Funds Market, Money Market, etc.).
3. Based on your answer to question 1:
a. What is the appropriate governmental policy response, if any,
after a month has passed and each group is proven wrong? Defend
your answer.
b. What will be the impact on total, consumption, and investment
spending, net exports, and the price level? Will interest rates be
affected? If so, how?
4. Graph the changes describe in your answer to question 3. Use all
appropriate graphs in your answer (AD-AS, Supply and Demand,
Loanable Funds Market, Money Market, etc.).
In: Economics
Briefly explain what a central bank is and what its most important task is. Discuss the U.S. central bank, including a brief explanation of what is involved in its decision making about the money supply and its ability to affect some goals of macroeconomic policy; including examples of some macroeconomic policy goals that would be affected. Conclude by explaining what is involved in its policies relating to the money and banking system.
In: Economics