A pharmaceutical firm faces the following monthly demands in the U.S. and Mexican markets for its only patented drug:

Q(U.S.) = 300,000 - 5,000 P(U.S.)

Q(Mex) = 240,000 - 8,000 P(fMex)

where quantities Q represent the number of prescriptions per month and the prices P are denominated in U.S. dollars (i.e., the Mexican demand has already been adjusted for the dollar/peso exchange rate). The marginal cost of the drug is constant at $2 per prescription in both markets. The firms monthly overhead costs for this drug are $1 million in the U.S. and $500,000 in Mexico.

a) Suppose that arbitrage between the markets is impossible, so the firm is able to charge different prices in each market. If the firm practices third degree (i.e., verifiable characteristics) price discrimination, what price will it charge in the U.S.? What price will it charge in Mexico? How much will it produce and sell in the U.S.? How much will it produce and sell in Mexico? What are the firm's total profits from the sale of the drug in this case?

b) Now suppose the firm cannot prevent arbitrage between the countries, so it is forced to charge the same price in the U.S. and Mexico. What price will it charge for the drug? How much will it produce and sell overall? What are the firm's total profits from the sale of the drug in this case?

c) Now suppose Congress is considering a law that would make arbitrage legal between the U.S. and Mexico (i.e., the law would allow for the importation and sale of drugs from Mexico to the U.S.). How much would the pharmaceutical firm spend per month on lobbying efforts to defeat this law, given your answers to parts (a) and (b).

Explain how the following events may affect the profit rate for a U.S. firm and industry (be sure to define your measure(s) of the profit rate) :Consider both the immediate impact and the possible long run implications: (1) across firms within an industry; (2) across industries and (3) across nations

please long and mindful answers that covers all three categories.

1. Consider Irving Fisher’s two-period model of consumption. Suppose that the

consumer also pay’s taxes T1 in the present, T2 in future.

a. Derive the inter-temporal budget constraint of the consumer.

b. Draw a graph that would represent optimization of consumption. Label the graph clearly.

c. Suppose future taxes decrease to T’2. Using a graph, show the effect of this on optimal consumption. Show in a new graph

d. Suppose the consumer’s future income increases to Y2 to Y’2, as well as real interest rate increases from r1 to r2. Show the effect of this on the consumer’s

optimal choice of present and future consumption. Would your result depend on income and substitution effect? Demonstrate the effect for:

i. When the consumer is a borrower. Show in a new graph

ii. When the consumer is a lender. Show in a new graph

The following information from the close of trading on November​ 24, 2010 is for an IBM bond with a face value of ​$1 comma 0001,000 and a maturity date of June 15 comma 2013June 15, 2013​: Coupon​ rate: 7.57.5​% ​Price: ​$1 comma 1581,158 Yield to​ maturity: 1.221.22​% The​ bond's current yield was nothing​%. ​(Round your response to two decimal​ places.) Why is the​ bond's yield to maturity less than its coupon​ rate?

Use the Keynesian model to explain the recessionary gap

The export/GDP ratio has generally __________ worldwide in recent decades.

Select the correct answer below:

increased

declined

remained constant

approached 1

Which of the following examples illustrates quantity supplied?

Select the correct answer below:

Firm A's costs of production decreased, so it wants to sell more at any price.

Technology improvement has made it cheaper to produce TV's so producers want to supply more.

Firm B has to reduce production of watches and reinvest into producing jewelry which is more profitable.

The price of houses has increased dramatically so more homeowners want to sell their house.

In market equilibrium, there are neither _________ nor __________.

Select the correct answer below:

surpluses; shortages

prices; quantities

high prices; low prices

none of the above

A price floor will most likely create an excess _________ for a particular good in a competitive market.

Select the correct answer below:

supply

demand

When the work required to produce a good or service is divided into tasks that are performed by different workers, that is called

Select the correct answer below:

economies of scale

specialization

division of labor

productivity

A house owner wants to maintain his house. What is the economic term for this desire? What enables a baker to obtain new shoes from a cobbler who doesn't need any baked goods?

Equilibrium prices will spontaneously establish themselves in a competitive market and will persist until things changes?

Which describes a price mechanism through which the government may correct a failing market?

Which is most likely to increase the supply of soldiers for an all-volunteer army?

Environmental Planning and Protection Organization, in year 2000, published a news, about defective device which was manufactured by one of the leading Auto Brand, Bugatti. The news exposed that many models of these cars, which were being sold in Europe, had a defective device installed. This device could change a car’s performance to improve its emissions results when being tested. After the investigation, the Bugatti officials have admitted for cheating in the test. Bugatti had to pay a hefty amount for damages as a result of the scandal, notably a $16 billion fine from the Environmental Planning and Protection Organization (EPPO). After being exposed globally, their share value dropped by 30 percent, wiping out over $33 billion in shareholder value. Bugatti’s management was faced with a series of criticism. The different publications expressed the view that Bugatti’s autocratic leadership style has long been out of date and that the organisation was missing effective corporate governance.

a. Bugatti is a high profile multinational auto industry. They have a rich legacy of top corporate leadership and highly skilled employees. They are equipped with modern technology, quality research, potential strategy, business development, and effective internal control system. What do you suggest, should be company’s vision and strategy to avoid huge fine, criticism, and defamation?

b. What do you think, if they would have followed conceptual framework, they would have not paid that much. Which conceptual framework was most related to this case study and why? (5 Mark

1)Which of the following describes a reason that firms may operate more efficiently than individual producers?

Limited liability increases a firm's access to credit

Transaction costs of production through the market exchange is greater than within the firm

All of these answers

2)

The behavior of potential buyers is represented by ___________ and the behavior of potential sellers is represented by __________.

the individual utility function; the production function

the individual utility function; the market supply function

the market demand function; the production function

the market demand function; the market supply function

the government should expand environmental regulations to promote job , for example " green jobs"and " green" industry .

How does government to do so in specific ways?

Should employees have freedom of conscience? When should they engage in whistle blowing tactics? Why might external whistle blowing occur in any given organization?

Business ethic class. chapter 8.