Economics of Enterprise Answers

when price is high demand is low true or false

assume there is uncertainty about the costs of disposing is the waste: there is 50 50 chance that they will bw $10000 of $30000. Discuss how this uncertainty effects the cost benefit calculation, if the government is risk neutral or very risk averse.

A University is proposing the development of a modern squash court, next to its current residence hall. For the first five years the University has offered to open the court to local players at student rates to secure local support for its planning application. The University will owe the courts anything it wants after five years. Accordingly, the University predicts that total court income for each of the first five years would be $1200, rising by 12% (compounded) in each of the sixth to tenth years. In the eleventh and twelfth years, increasing operating expenses would entirely outweigh increasing revenues, ensuring that net income stays at the pace of ten years. The site’s set for renovation the end of the twelfth year.It is projected the expense of construction the squash is $6500.

If a federal interest rate was imposed by the Government 30% ceiling on all loans that would be earned and who will they lose?

1.Calculate the midpoint price elasticity of demand using the price of $5 and $7. The demand function is:

Q = 1,500 - 200P

Where Q is quantity demanded and P is price.





2.A new company estimates fixed costs for its product of $50,000 per year and average variable costs of:

AVC=$0.5+$0.0025Q,

Where AVC is average variable cost (in dollars) and Q is output.

Calculate total cost and average total cost for the projected first-year volume of 20,000 units.





3.Calculate profit from the following demand and total cost functions at output level of 160 units:

Q = 448 - 16P

TC = 1000 + 5 Q

. An entrepreneur starts a small firm with one machine, and a small factory space and employs one person initially. With the aid of appropriate diagrams/table and theory, explain the process of production as he increases his output. Indicate clearly what law governs this process of production, the variable and the fixed factors used by this entrepreneur.

an entrepreneur starts a small firm with one machine, and small factory space and employs one person initially. With the aid of appropriate diagram and theory, explain the process of production of proas he increases his output.Indicate clearly what law governs this process

In late 1981, your father went to a Honda dealer in his home state and paid about $1,000 more for a Civic than he would have paid the year before. Why?

How would a manufacturer benefit by using fewer scarce resources?

What kind of market structure lux is operating within? Compare and contrast it with other market structures you have studied based on price,output and profit. Be sure to include graphs in your discussion.