Economics Answers

A certain town in a state obtains all of its electricity from one company, South Electric. Although the company is a monopoly, it is owned by the citizens of the town, all of whom split the profits equally at the end of each year. The CEO of the company claims that because all of the profits will be given back to the citizens, it makes economic sense to charge a monopoly price for electricity. Do you agree with the CEO’s argument? Give reasons. What are the social costs of monopoly power? What are the measures do you suggest to control monopoly power?

Fort Inc., competes against many other firms in a industry. Over the last decade, several firms have entered this industry and, as consequences, Fort is earning a return on investment that roughly equals the interest rates. Furthermore, the four-firm concentration ratio and Herfindahl Hirschman index are both quite small. Based on this information, which market structure best characterizes the industry in which Fort competes? Explain the characteristics this market structure and what happens to the Fort Inc’s profit in the short-run and long-run. What are your strategic advices to Fort Inc. to sustain its profit in the long-run?

Jan is risk-averse, but wants to earn the best rate of return in less than two years. Which investment would MOST LIKELY meet Jan's need?

Qd=200-1/2×4910+1/4×5900-5×90+1/5×55000

what is normal profit

Given the following variables in the open economy aggregate expenditure model, autonomous consumption (C0) = 800, autonomous investment (I0) = 600, government spending (G0) = 700, export spending (X0) = 400, autonomous import spending (M0) = 700, taxes (TP) = 200, marginal propensity to consume (c1) = 0.75, marginal propensity to invest (i1) = 0.2, and marginal propensity to import (m1) = 0.15.

a. Calculate the equilibrium level of income for the open economy aggregate expenditure model. (Show all your steps carefully.)

b. If there is a decrease in the marginal propensity to consume from 0.75 to 0.65, calculate the new equilibrium level of income and the value of the multiplier. (Again, show all your steps carefully.)

Law of Diminishing Marginal Utility states that marginal utility from consuming each additional unit of a commodity declines as its consumption increases, while keeping consumption of other commodities constant. Here my doubt is that "keeping consumption of other commodities constant" means what? Here other commodities means which one? Please clarify this with an example.

without a price ceiling the equilibrium price was 10. the government implements a price ceiling of 8?

In September​ 2015, the unemployment rate was 7.0​ percent, the inflation rate was 0.1​ percent, and the overnight loans rate target was 0.5 percent. In September​ 2017, the unemployment rate was 6.2​ percent, the inflation rate was 1.4​ percent, and the overnight loans rate target was 1.0 percent.
Why might the Bank of Canada decide to raise the overnight loans rate in​ 2018?
The Bank Canada might decide to raise the overnight rate in 2018 if​ _______.

Assess bundling strategy in managing a super market.