For most consumers, maximizing utility through consumption generally means finding good deals in order to maximize the utility received for each dollar spent. However, some makers of luxury goods believe that their customers actually achieve utility by paying high prices, such that lowering prices may lead to reduced sales. How is this counterintuitive view rationalized in our analysis of consumer behavior and the utility-maximizing rule?

1. For competitive firms, they set marginal cost equal to market price at profit-maximizing level of output.
2. In the short run, marginal revenue curve faced by a competitive firm is downward-sloping.
3. Competitive firms always produce a positive amount of output in the short run (q > 0).
4. Competitive firms earn zero economic profit in the long run equilibrium.

All these are True False Questions

What is the frontier thesis? What role does Turner argue the frontier has played in American history? from “Significance of the Frontier in American History” essay. 300 WORDS!

Assignment 3

BUS 151: Microeconomics

Semester 402

Total Marks=20

Note: Answers should be written with appropriate headings. You may also draw figures to answer your questions more clearly.

Question 1: Explain with your example that how a country with absolute advantage in its production of two goods can gain from trade from another country which has no comparative advantage on the same goods. (6 marks) Chapter 3

Question 2: By explaining law of demand and law of supply show how prices of goods and services are determined in all types of market? What are those forces that move a market towards equilibrium? Why it is not advisable for any government of rely on price floor and price ceiling? (4+2=2= 8 marks) chapters 4&6

Question 3: What are the main influences on the elasticity of demand that that makes the demand for some goods elastic and demand for another goods inelastic? What are the main influences on the elasticity of supply that make the supply of goods elastic and the supply of other goods inelastic?(3+3=6 marks) Chapter 5

1. Do you think the four principles of high involvement provide for an adequate context for designing high-performance work systems? What other concerns or guidelines for developing high-performance work systems would you suggest?

1.If the price level in the current period is higher than what buyers and sellers anticipated, what will tend to happen to real wages and the level of employment? How will the profit margins of business firms be affected? How will the actual rate of unemployment compare with the natural rate of unemployment? Will the current rate of output be sustainable in the future?

5. (a) What is the difference between the real interest rate and the money interest rate?

(b) Suppose that you purchased a $5,000 bond that pays 7% interest annually and matures in five years. If the inflation rate in recent years has been steady at 3% annually, what is the estimated real rate of interest? If the inflation rate during the next five years rises to 8%, what real rate of return will you earn?

6. How is a nation’s trade balance related to its net inflow of foreign capital? If the inflow of foreign capital is used to finance the federal deficit, how will the well-being of future generations be affected?

You work for a business solutions organization in the United States. As the project manager, you are responsible for working with departments located in the United States and overseas in Italy and India. How would you respond to the following questions?

• What type of processes and documentation will you need to get this project initialized?
• How will the culture and structure of the organization influence the success of the project’s initialization?
• As the project manager, how can you use technology to lead this multinational project?

what is a mixed strategy nash equilibrium and what does it mean when a player has a dominated strategy

3. What are the major determinants of price elasticity of demand? Use those determinants and your own reasoning in judging whether demand for each of the following products is probably elastic or inelastic: (a) bottled water; (b) toothpaste; (c) Crest toothpaste; (d) ketchup; (e) diamond bracelets; (f) Microsoft Windows operating system. LO4.1

6. How would the following changes in price affect total revenue? That is, would total revenue increase, decrease, or remain unchanged? LO4.2

1. Price falls and demand is inelastic.
2. Price rises and demand is elastic.
3. Price rises and supply is elastic.
4. Price rises and supply is inelastic.
5. Price rises and demand is inelastic.
6. Price falls and demand is elastic.
7. Price falls and demand is of unit elasticity.

11. Suppose the cross-elasticity of demand for products A and B is +3.6, and for products C and D is −5.4. What can you conclude about how products A and B are related? Products C and D? LO4.5

projects with unequal lives cause problems when making decisions decision making? how can we overcome this problem?

1. “A project’s engineering life does not always equal its economic life.” Explain this statement with an example

  ECO 102/103 RUBRIC

Compare the following 2 alternatives using the incremental rate of return method. Determine which is the most efficient and which is the most profitable. MARR=8% per year compounded yearly. (Note: For full credit, I want you to compute the actual IRR values)

1. In response to the COVID-19 outbreak, the Bank of Canada has cut the key interest rate by 50 basis points to help stimulate the economy. (Chapter 28) Complete the following:
   1. Graph the decline in interest rate and discuss what happened.
   2. What parts of the AE function are effected and how? Graph the change in the AE model.
   3. Graph the AD/AS function and close the gap. What gap was closed? What is expected to happen to GDP and price levels as a result of the interest rate cut?

InterBearing is a major manufacturer of Bearings. In the initial example, this producer of bearings is a monopoly. The Total Cost Function is: TC = 1000 + 8Q & the Demand Function is Q = 21 – P_Q

1. What is the CS in the Perfectly Competitive Model?
2. What is the Deadweight Loss in the Monopoly Model?
3. If the Government added a $13 tax to each unit sold by the Monopolist, how much would CS Fall? How Much Tax Revenue would be raised?
4. If the Government added a $13 tax to each unit sold in a Competitive Market, how much would CS Fall? How much Tax Revenue would be raised?