The Acmeville Metropolitan Bus Service currently charges $ 0.99 for an all-day ticket, and has an average of 623 riders a day. The bus company is not earning a profit, but according to their contract with the city, they cannot cut the number of buses on the road. They must therefore find a way to increase revenues. The bus company is considering increasing the ticket price to $ 1.1 . The marketing department's studies indicate this price increase would reduce usage to 359 riders per day. Calculate the absolute value of the price elasticity of demand for bus tickets using the simple percentage change method. Round your answer to one decimal place.

What is meant by the claim that a competitive market equilibrium is Pareto efficient?

6.3 In a competitive market, the market demand curve is Q = 28 - 2p and the market supply curve is 19 If you do not see the Solver tool, you need to load it first. Look up Solver in the Excel help facility for instructions. Qs = -8 + 2p. Use a spreadsheet to answer the following questions.

a. Determine the quantity demanded and quantity supplied for p = $4, 5, 6, …, 14. Determine the equilibrium quantity and price.

b. For prices p = $4, 5, 6, …, 14, determine the consumer surplus. How does an increase in price affect the consumer surplus?

c. For prices p = $4, 5, 6, …, 14, determine the producer surplus. How does an increase in price affect the producer surplus?

d. Suppose the government limits the quantity traded in the market to 6 units. Calculate the resulting deadweight loss.

PLEASE SHOW ANSWERS AND FORMULAS IN EXCEL

Perloff, Jeffrey M.. Managerial Economics and Strategy (p. 265). Pearson Education. Kindle Edition.

Complete the table by calculating marginal productivity (MP) of labor and average productivity (AP) of labor. Then plot the total product, MP, and AP and explain the relationship between MP and AP. Why does MP first rise and then decline?

Explain Demand Estimation and Forecasting with Excel with regard to economics. Give examples as necessary.

Why do you need to implement Price Discrimination Schemes? Looking for some original content.

Suppose there exists external economies of scale in an industry located in country X. If country X moves from free trade to autarky, it necessarily loses welfare. Explain in detail, using any relevant diagrams, whether the above statement is true, false or uncertain.

According to the discouraged worker effect, the official unemployment rate in bad times always understates the real situation. Provide a short answer explaining why that is the case.

1. Assume that your widget manufacturing company has a total annual demand of N widgets per year evenly distributed across the year. Each widget cost $b dollars in material and manufacturing costs to make. Every time you do a production run to make some widgets, you incur a set-up cost of P dollars. Any widgets awaiting sale must be stored and thus incur an average storage fee of c dollars per widget per year. Let x be the size of each production run (i.e. x is the number of widgets per production run).

1. Write a cost function C(x) and explain each term in the equation and how it was determined.
2. Write down any constraints on the allowable values of x.
3. Determine a formula for the value of x that minimizes total annual cost. Show all of your work.
4. Prove that your formula actually corresponds to the global minimum cost.
5. Write down a formula for the number of production runs per year as a function of x.

1. Table 1 given below shows the number of labor hours required to produce 1 bushel of wheat and 1 ton of iron in Russia and North Korea.

Table 1

You make several Ricardian assumptions: these are the only two commodities, the productivity of labor is constant for each product no matter how much is produced, and competition prevails in all markets.

1. Compute the productivity of each country for each product. Which country has an absolute advantage at producing wheat? Which country has an absolute advantage at producing iron?  

2. Compute the relative prices of each product in each country without trade.    Which country has a comparative advantage at producing wheat? Which country has a comparative advantage at producing iron?  

3. According to the theory of comparative advantage, which country would export wheat? Which country would export iron?  

If Russia and North Korea are allowed to trade, between what prices would the international relative price of iron be? Between what prices would the international relative price of wheat be?  

Please show work and step by step explanation. Thanks!

Do you agree or disagree that the U.S. should raise the minimum wage? How could this affect different levels of the economy?

A long time ago in a galaxy far, far away…

After the fall of the Empire, the turmoil leads many former Imperial Stormtroopers to turn to deathsticks for relief. Deathsticks are a highly addictive drug that causes users to hallucinate. Given this information, in the deathstick market there is likely a (negative/positive/no) externality in (consumption/production/either side of the market). This means the marginal social (benefit/cost) is greater than the marginal private (benefit/cost) in this particular market, and the equilibrium quantity is (the same/greater than/less than) the efficient quantity.

Having conquered the spice mines of Kessel, Jabba’s successor Ziro the Hutt has taken control of the galaxy’s deathstick market. In other words, Ziro is the only producer of deathsticks in the galaxy. As Ziro notices that as he produces deathsticks, the marginal cost of deathstick production increases. Graph Ziro’s cost curves (ATC, AVC, MC), the price and/or marginal revenue curve(s), and indicate the point where Ziro will produce. Be sure to show any deadweight loss or profit if any exists.

SUGAR’S BITTER TASTE Sugar prices have slumped to a 20-year low… In the last 5 years, annual supply increased by 3.6 percent, while consumption expanded by a mere 1.5 percent. Stocks of sugar doubled while prices tumbled from 134 cents to 50 cents. Higher incomes increased the demand for sugar but supply increased more. New countries began sugar production, agricultural productivity increased and there was a collapse of the 1989 agreement to place quantity ceilings on exports. For many Third World sugar producers – some of whom get 70 percent of their export revenue from sugar – low prices have been a disaster. The power of multinationals has not helped. In some cases, farmers get only 6% of the retail price in the shops. Nestlé now controls about half the world market for instant sugar. (i). Using a relevant demand and supply diagram, analyse the reasons why the price of sugar tumbled from 134 cents to 50 cents. [5] (ii). Producers’ Associations usually fix minimum prices to encourage production. Analyse the constraints in making minimum price policies successful. Support your answer with relevant examples. [7] (iii). Analyse the reasons why some farmers get only 6% of the retail price in the shops and suggest policy measures which can be adopted to increase the revenue accruing to farmers. [8] 2 (b) The own price elasticity of demand for food is negative. The demand for food is inelastic. A higher food price raises spending on food. Higher food prices imply less is spent on all other goods. The quantity demanded of each of these other goods falls. Discuss each of the above statements, and indicate whether they are correct or incorrect. [10]

What are the effects on U.S economy if the Cost of Health care keeps rising?  

An investor buys 1,000 shares of Tundra Enterprises, Inc. at $45 1/2 per share. A year later, he sells his entire position at $53 1/4. The firm paid a dividend of $0.75 per share during this period. Based on this information, calculate the investor's realized return