Your firm is using 300 units of labor and 2000 units of capital to produce 5000 units of output. If you hired an additional unit of labor output would increase by 10 units. An extra unit of capital would add 25 units of output. The wage rate is $10 per hour, and the rental rate is $50.

1. What are the marginal products of labor and capital per dollar?
2. Is your firm producing at the lowest possible cost? How do you know?
3. What should the firm do to minimize the cost of producing 5000 units of output?
4. What would happen to MP_L and MP_K?

You are an economic advisor to the Treasurer of the United States. Congress is considering increasing the sales tax on gasoline by $.03 per gallon. Last year motorists purchased 10 million gallons of gas per month. The demand curve is such that every $.01 increase in price decreases sales by 100,000 gallons per month. You also know that for every $.01 increase in price, producers are willing to provide 50,000 more gallons of gasoline to the market. The legislature has stated that the $.03 tax will increase government revenues by $300,000 per month and raise the price of gasoline by $.03 per gallon. Is this correct? Explain and show your work.

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Analyze the case of rise in price of Daraprim using the concept of Elasticity of Demand. Make sure to include the three main factors that affect elasticity of demand and comment on how each factor contributed to the rise in price of Daraprim overnight.

Assume that an economy's long-run equilibrium is described as follows:
economic growth at 2.5% pa, the natural rate of unemployment at 6% and expected inflation at 2%.
Using large AD/AS and Phillips curve diagrams, illustrate the short-run effects of the given policy or event on the economy (Assume the price level is not sticky):

Starting Position: Recession, below natural rate.
Policy/event: No policy respose.

4. Read the article, “Opinion: The New Socialists: Why the pitch from Alexandria Ocasio-Cortez and Bernie Sanders resonates in 2018.” attached with this Problem Set and answer the following questions.

   1. (a) According to Robins, what has been the Democratic party’s failure that makes it vul- nerable to its internal socialist critics?

   2. (b) Why does the author think “power” is a more effective political focus than “poverty” for Democratic politicians?

   3. (c) Identify some possible public policies that would increase average Americans’ freedom?

Question 1: There are many sellers in a perfectly competitive market. So many that

A. there is tremendous rivalry between firms.

B. if any one of them produced more or less, there would be a change in market price.

C. one producer may have a large market share.

D. each one is a price taker.

Question 2: In a perfectly competitive market,

A. there are many buyers and many sellers.

B. the goods for sale from one producer are perfect substitutes for those produced by another.

C. there is free entry into and exit from the industry.

D. all of the above

Question 3: Perfectly competitive firms produce where

A. profit is maximized

B. MR=MC

C. P= MC

D. all of the above

Question 4: The marginal revenue curve of a perfectly competitive firm is

A. equal to the marginal cost curve.

B. below the marginal cost curve.

C. above the marginal cost curve.

D. perfectly elastic at the market price.

Question 5: Which of the following goods are standardized products or commodities?

A. Automobiles

B. Corn

C.. Computers

D. DVD players

Question 6: In the perfectly competitive market for tomatoes in the long run, the typical tomato farm will

A. break even

B. earn an economic loss

C. earn an economic profit

D. earn an economic loss but continue to produce

Question 7: If Bob, who is operating a perfectly competitive firm, knows that his minimum average total cost is $2, minimum average variable cost is $1.50, and marginal revenue is $3

A. Bob will earn an economic profit.

B. Bob will break even.

C. Bob will earn an economic loss but continue to produce in the short run.

D. Bob will earn an economic loss and shut down in the short run.

Question 8: Tom, who is operating a firm in the perfectly competitive gizmo industry, is hoping to break even. But given the market price of $10 he is incurring a loss. Tom should

A. continue to produce in the short run as long as his average total cost is more than $10.

B. continue to produce in the short run as long as his average variable cost is more than $10.

C. continue to produce in the short run as long as his average variable cost is less than $10.

D. Shut down

Question 9: Julie also is operating a firm in the perfectly competitive gizmo industry. The market price is P = $10 and she produces Q = 12 gizmos a day. Given that Julie's average total cost is ATC = $12 and her total fixed cost is TFC = $24, we know that Julie's

A. average fixed cost is $1.50.

B. average profit is −$4.00.

C. average variable cost is $10.

D. marginal revenue is $12.

Question 10: Julie is operating at a loss when

A. P=MC

B. P<ATC

C. P>ATC

D. ATC=MC

Question 11: Julie's competitive supply curve is the

A. marginal revenue curve.

B. marginal cost curve.

C. average variable cost curve above the market price.

D. marginal cost curve above the minimum point on the average variable cost curve.

Question 12: If the firms in the perfectly competitive gizmo industry are incurring losses but continue to produce, in the long run

A. firms will enter the industry and prices will fall.

B. firms will exit the industry and prices will rise.

C. firms will enter the industry and prices will rise.

D. firms will exit the industry and prices will fall.

Question 13: As firms enter a perfectly competitive industry in the long run, the short run industry supply curve will shift to the _______ and the market price will ______ until the typical firm __________________________.

A. Left Rise Breaks even

B. Right Fall earns an economic profit

C. Right Fall Breaks even

D. Left Rise incurs an economic profit

Question 14: In the perfectly competitive market for corn, long-run market equilibrium is disturbed by an increase in demand for bio-fuel. In the short run, farmers will ______ output and earn (incur) a _______

A. Reduce Profit

B. Increase   Profit

C. Reduce Loss

D. Increase Loss

Question 15: Jack and Jill run a bed-and-breakfast in Booth Bay Harbor, Maine. During the summer business is great, but the winter is another story. Although they get some tourists who enjoy the winter scene in coastal Maine, business is very slow. Jack and Jill are trying to decide whether to shut down during the winter months. They should shut down if

A. total revenue exceeds fixed cost.

B. total revenue exceeds variable cost.

C. total revenue is less than total cost.

D. price is less than average variable cost.

Regulation on the Australian banking industry includes the Australian Prudential Regulation Authority (APRA); the Australian Securities and Investments Commission (ASIC); the Reserve Bank of Australia (RBA); and the Australian Treasury. Explain how these regulatory authorities affect the four major banks’ strategies to take risky business such as lending to highly leveraged firms and/or investing on risky financial assets domestically and internationally.

2. Two months ago, your five-year-old car suddenly required serious repairs. Faced with spending $2,500 on the engine work or junking the car and buying a different one, you chose the repairs. Now, however, your transmission’s shot, and fixing it will cost you another $500. Alternatively, you could sell the car as is for $1,000 and buy a different one. You know that the car will likely require further repairs in the future, though you hope it won’t happen soon.

   (a) Give an answer that clearly spells out the kind of reasoning we describe as the “sunk cost fallacy”. (Include numbers in your answer)

   (b) Now give an answer that avoids the sunk-cost fallacy.

Calculate the coefficient of variation between these two-income distribution

(a) (2,2,4,6,8,20,30,40,60,100)

(b) (8,18,20,22,26,28,30,32,40,48)

Use real or hypothetical examples as a way to illustrate your explanation:

- FOREX Market: structure, participants, significance

1. What is the pricing strategy that Angie’s List used in late 2015? How does this pricing strategy differ from the market-specific pricing model Angie’s List used before that? What is at least one advantage and one disadvantage of the new pricing strategy compared to the previous one?

what is the effect of tourism in corona virus ? related in ASEAN

In an IS-LM model, if we assume that money demand is completely insensitive to changes in the interest rate

A.) interest rates cannot be lowered by fiscal policy

B.) fiscal policy can neither change the level of output nor the composition of GDP

C.) monetary policy can change income

D.) monetary policy is totally ineffective in changing the rate of interest

E.) the economy cannot be stimulated by fiscal or monetary policy

How can solving the Monopoly’s firm problem explain the competition between Pepsi and Coke?

Suppose you're analyzing the market for pancakes and sausage on a stick and the market is comprised of two firms. The first firm is Jimmy and jimmy has been in this market for years and has first-mover advantage. The brand GreatValue also decides that they will produce and sell pancakes and sausage on a stick. You know that the market demand for pancakes and sausage on a stick is P = 100 – Q. And you also know that the cost function for Jimmy Dean is C = 10Q and the cost function for Great Value is C = 20Q.

a) Calculate the equilibrium quantity produced by each firm when they maximize profits.

b. Calculate the profits of each firm.