Suppose we have n firms in a perfectly competitive industry. The shapes of the marginal and average cost curves are as usual, i.e., they are U-shaped. The industry demand curve is downward sloping. Please answer the following questions associated with this simple model. a. Write down the basic assumptions of a perfectly competitive industry. We have frequently stated that these assumptions were very crucial in obtaining certain results from this model. Explain each assumption in that sense in a few sentences. b. Describe the industry equilibrium and corresponding long-run equilibrium of any firm in this market. For this analysis, you are supposed to draw two graphs. c. If there is an increase in the demand for the product in this industry, how is the market going to be affected? What will be the effect of this change on a representative firm in the short-run? Explain possible profit opportunities in the market. As you did in part (b), draw two graphs showing all these changes. For simplicity purposes, please use the same long-run AC curve for your analysis. d. How will the industry adjust to the change in the demand in the long-run? More briefly: (i) What will happen to the number of firms in the industry? (ii) What are the properties of the new long-run equilibrium in terms of profits? (iii) Which particular assumption(s) did you use in reaching these conclusions? Assume a change in total industry supply will not change the input prices.

Training of ethics in many companies may not be considered as sufficient strategy. Do you agree?please explain.

Which of the following depreciation methods does not use salvage value?

Which of the following statements is correct?

Which of the following depreciation methods is good for “Tax Purposes”? In other words, the usage of this method will reduce your tax obligation.

As the interest rate increases, the present value of an amount to be received at the end of a fixed period ____

which of the following is an example of Sunk cost:

If we are covering materials and labor costs of an item in a Managerial Accounting course, we are referring to which of the following concepts:

If an airline places an order to buy 40 new planes and negotiates an attractive price for this fleet, because it buys so many planes, this is an example of:

Suppose we have n firms in a perfectly competitive industry. The shapes of the marginal and average cost curves are as usual, i.e., they are U-shaped. The industry demand curve is downward sloping. Please answer the following questions associated with this simple model.

a. Write down the basic assumptions of a perfectly competitive industry. We have frequently stated that these assumptions were very crucial in obtaining certain results from this model. Explain each assumption in that sense in a few sentences.

b. Describe the industry equilibrium and corresponding long-run equilibrium of any firm in this market. For this analysis, you are supposed to draw two graphs.

c. If there is an increase in the demand for the product in this industry, how is the market going to be affected? What will be the effect of this change on a representative firm in the short-run? Explain possible profit opportunities in the market. As you did in part (b), draw two graphs showing all these changes. For simplicity purposes, please use the same long-run AC curve for your analysis.

d. How will the industry adjust to the change in the demand in the long-run? More briefly: (i) What will happen to the number of firms in the industry? (ii) What are the properties of the new long-run equilibrium in terms of profits? (iii) Which particular assumption(s) did you use in reaching these conclusions? Assume a change in total industry supply will not change the input prices.

11. Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time. As a result,
(x) aggregate demand shifts to the right
(y) the price level falls and real GDP rises
(z) the expected price level falls and bargains are struck for lower wages.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (z) only
12. Suppose the economy is in long-run equilibrium. If there is an increase in consumer spending due to a tax rebate at the same time that a natural disaster adversely affects the availability of production inputs within the country, then in the short-run we would expect
A. the price level will rise, and real GDP might rise, fall, or stay the same.
B. the price level will fall, and real GDP might rise, fall, or stay the same.
C. real GDP will fall and the price level might rise, fall, or stay the same.
D. real GDP will rise and the price level might rise, fall, or stay the same.
E. the price level might rise, fall or stay the same and real GDP might rise, fall, or stay the same.
13. Suppose the economy is in long-run equilibrium. If there is a significant consumption (sales) tax increase at the same time that major new sources of oil are discovered in the country, then in the short-run we would expect
A. real GDP will fall and the price level might rise, fall, or stay the same.
B. real GDP will rise and the price level might rise, fall, or stay the same.
C. the price level might rise, fall or stay the same and real GDP might rise, fall, or stay the same.
D. the price level will rise, and real GDP might rise, fall, or stay the same.
E. the price level will fall, and real GDP might rise, fall, or stay the same.

Suppose a pure monopolist sells output in two different markets [A&B]. (third-degree price discrimination!). The demand curves are given as: Market A: PA = 20 - .1QA Market B: PB = 10 - .1QB where PA, QA are price and quantity in Market A; and PB, QB are price and quantity in Market B. The firm's marginal cost of production, MC=$5.00 and constant (hence, MC=AC). Fixed costs are zero.

a) Determine the profit-maximizing quantity (Q) and price (P) for each market (i.e. QA & PA; and QB & PB ).

(b) How much (total) profit (or loss) does the firm make?

c) What are the benefits of ‘second-degree’ and ‘third-deg

Indicate whether the following statement is true/false/uncertain and explain why:

1. The Heckscher-Ohlin-Samuelson theory is likely to explain the rise of the skill premium in the US and other industrialized countries in recent decades, because in the data we have observed a rise in the price of skill-intensive goods relative to unskilled labor-intensive goods over the same period.

2. In the Melitz model if the transport cost t is zero then opening up to trade does not force the least productive firms to exit the market (compared to autarky)

3. An individual worker may be better off as a result of trade in the short run, but maybe worse off in the long run.

4. The HOS theory predicts that, if countries start trading goods, the factor prices(returns to factors, for example wages) will become more similar across countries.

You are interested in estimating the average number of pizza slices a college student eats in one month. In a random sample of 30 college students, you find the average to be 18.924 slices with a sample variance of 120. What is the p-value for a two-sided hypothesis test where the null is that the true population mean is 14 slices per month?

14. Suppose the economy is in long-run equilibrium. If there is an expansion of government spending at the same time that a significant increase in immigration of skilled workers reduces production costs, then in the short-run we would expect
A. real GDP will fall and the price level might rise, fall, or stay the same.
B. real GDP will rise and the price level might rise, fall, or stay the same.
C. the price level will fall, and real GDP might rise, fall, or stay the same.
D. the price level will rise, and real GDP might rise, fall, or stay the same.
E. Either A or C will occur.
15. According to the AD/AS model, which of the following statements is (are) correct?
(x) Stagflation occurs if the economy experiences both an increase in prices and a reduction in output.
(y) Stagflation occurs if the aggregate supply curve shifts to the left because prices rise and output falls.
(z) An increase in the price level with a corresponding reduction in real GDP could be created by natural disasters such as floods, hurricanes and unusually dry weather
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (y) only

How has the office superstore market changed in the 18 years since Staples and Office Depot originally attempted to merge?