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Economics
What causes the crowding-out effect?
a. large government borrowing
b. low interest rates
c. a growing economy
d. a poor economy
a. large government borrowing
b. low interest rates
c. a growing economy
d. a poor economy
Economics
How might a budget deficit be related to the national debt?
a. A deficit adds to the debt.
b. The debt adds to a deficit.
c. A deficit subtracts from the debt.
d. The debt subtracts from a deficit.
Economics
Write-Right, a vertically integrated firm produces both paper and writing tablets. The demand for tables is given by
PT = 1.00 0.001Q
where Q is the quantity of tablets. The marginal cost of producing the paper necessary for tablet is
MCP = 0.20 + 0.001Q
It costs the firm $0.10 to make the paper into a writing tablet. If there is no external market for the paper, what transfer price should top management set for the paper?
PT = 1.00 0.001Q
where Q is the quantity of tablets. The marginal cost of producing the paper necessary for tablet is
MCP = 0.20 + 0.001Q
It costs the firm $0.10 to make the paper into a writing tablet. If there is no external market for the paper, what transfer price should top management set for the paper?
Economics
Suppose that the total cost equation (TC) for a monopolist is given by
TC = 500 + 20Q2
Let the demand equation be given by
P = 400 20Q
What are the profit-maximizing price and quantity?
TC = 500 + 20Q2
Let the demand equation be given by
P = 400 20Q
What are the profit-maximizing price and quantity?
Economics
Explain why short run average cost can never be less than long run average cost.
Economics
The production function for Superlite Sailboats, Inc., is
Q = 20K 0.5 L 0.5
with marginal product functions
MPK = 10 (L/K) 0.5 and MPL = 10(K/L) 0.5
If the price of capital is $5 per unit and the price of labor is $4 per unit, determine the path for the firm.
The firm currently is producing 200 units of output per period using input rates of L = 4 and K = 25. Is this an efficient input combination? Why or why not? If not, determine the efficient input combination for producing an output rate of 200.
Q = 20K 0.5 L 0.5
with marginal product functions
MPK = 10 (L/K) 0.5 and MPL = 10(K/L) 0.5
If the price of capital is $5 per unit and the price of labor is $4 per unit, determine the path for the firm.
The firm currently is producing 200 units of output per period using input rates of L = 4 and K = 25. Is this an efficient input combination? Why or why not? If not, determine the efficient input combination for producing an output rate of 200.
Economics
What is meant by optimum combination of inputs? What are the technical conditions of optimal combinations of inputs?
Economics
The price elasticity for rice is estimated to be 0.4 and the income elasticity is 0.8. At a price of $0.40 per pound and a per capita income of $20,000, the demand for rice is 50 million tons per year.
Is rice an inferior good, a necessity, or a luxury? Explain.
If per capita income increases to $20,500, approximately what will be the quantity demanded rice?
Is rice an inferior good, a necessity, or a luxury? Explain.
If per capita income increases to $20,500, approximately what will be the quantity demanded rice?
Economics
The price elasticity for rice is estimated to be 0.4 and the income elasticity is 0.8. At a price of $0.40 per pound and a per capita income of $20,000, the demand for rice is 50 million tons per year.
Is rice an inferior good, a necessity, or a luxury? Explain.
If per capita income increases to $20,500, approximately what will be the quantity demanded rice?
Economics
Explain Income Elasticity and Cross Elasticity.
R.J. Smith Corporation is a publisher of novels. The Corporation hires an economist to determine the demand for its product. After months of hard work, the analyst tells the company that the demand for the firm's novels (Qx) is given by the following equation:
Qx = 12,000 - 5,000Px + 5I + 500Pc
Where Px is the price charged for the R.J. Smith novels, I is income per capita and Pc is the price of books from competing publishers. Using this information the board of directors want you to
(a) Determine what effect a price increase would have on total revenues.
(b) Evaluate how sales of the novels would change during a period of rising incomes.
(c) Assess the probable impact if competing publishers raise their prices.
Assume initial values of Px, Pc and I are $5, $10,000 and $6 respectively.
R.J. Smith Corporation is a publisher of novels. The Corporation hires an economist to determine the demand for its product. After months of hard work, the analyst tells the company that the demand for the firm's novels (Qx) is given by the following equation:
Qx = 12,000 - 5,000Px + 5I + 500Pc
Where Px is the price charged for the R.J. Smith novels, I is income per capita and Pc is the price of books from competing publishers. Using this information the board of directors want you to
(a) Determine what effect a price increase would have on total revenues.
(b) Evaluate how sales of the novels would change during a period of rising incomes.
(c) Assess the probable impact if competing publishers raise their prices.
Assume initial values of Px, Pc and I are $5, $10,000 and $6 respectively.
