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Ngày tải lên: 04/04/2015, 13:01

... to 2001 = 1.54 − 1.88 1.88 =−0.18 =−18% . c. Convert the CPI into 1990 = 100 and determine the real price of butter in 1990 dollars. To convert the CPI into 1990=100, divide the CPI for each ... all over the United States. Therefore the market for fast food is a national market. This statement is false. People generally buy fast food within their current location and do not travel ... they live. Therefore there is a clothing market in, say, Atlanta that is distinct from the clothing market in Los Angeles. This statement is false. Although consumers are unlikely to travel across...

Ngày tải lên: 23/12/2013, 14:15

... are the prices of natural gas and oil, respectively. Also, verify that if the price of oil is $8.00, these curves imply a free market price of $2.00 for natural gas. To solve this problem, we ... $8.00, these curves imply a free market price of $2.00 for natural gas. Substitute the price of oil in the supply and demand curves to verify these equations. Then set the curves equal to each ... demand curve be of the general form Q=a-bP and the supply curve be of the general form Q=c + dP, where a, b, c, and d are the constants that you have to find from the information given above. To...

Ngày tải lên: 23/12/2013, 14:15

... perfect substitutes, the indifference curves are linear. To find the slope of the indifference curve, choose a level of utility and find the equation for a representative indifference curve. Suppose ... normal convex shape. However since Jones has an overall preference for hockey and Smith has an overall preference for rock concerts, their two sets of indifference curves will have different ... Janelle has indifference curves that are vertical. If the styling is there she will take it, but she otherwise does not care about it. As her indifference curves move over to the right, she gains...

Ngày tải lên: 23/12/2013, 14:15

... The demand curves for the general public ( Q gp ) and students ( Q s ) are given below. Q gp = 500 − 5P Q s = 200 − 4P a. Graph the two demand curves on one graph, with P on the vertical axis ... her indifference curves are L-shaped. Intuitively if the two goods are complements, there is no reason to substitute one for the other during a price change because they have to be consumed in ... by 10%, will revenue increase or decrease? If elasticity is really -1 then revenue will fall if price is increased. If elasticity is actually closer to -0.67 (inelastic) then revenue will rise...

Ngày tải lên: 23/12/2013, 14:15

... whoever invents such a mayonnaise substitute first. Sam’s SCAM seems like a very risky proposition to you. You have calculated his possible returns table as follows. Probability Return .999 ... $40 to maintain the current level of deterrence. b. Now assume that drivers are highly risk averse. How would your answer to (a) change? If drivers are risk averse, their utility of a certain ... way. On the one hand, Treasury bills now have a higher return and so are more attractive. On the other hand, the investor can now earn a higher return from each Treasury bill so could hold...

Ngày tải lên: 23/12/2013, 14:15

... different task. If there is only 1 worker, then that worker will have to take orders and prepare all the food. Eventually, however, the marginal product would diminish because there would be ... tasks. 2. Suppose a chair manufacturer is producing in the short run (with its existing plant and equipment). The manufacturer has observed the following levels of production corresponding ... campaign manager will use only one input based on the relative prices. If the inputs are not perfect substitutes, the isoquants will have a convex shape. The campaign manager will then use a combination...

Ngày tải lên: 23/12/2013, 14:15

... U-shaped AC curve, the second derivative of the average cost curve must be positive. The first derivative is c + 2dQ; the second derivative is 2d. If the second derivative is to be positive, then ... > 0, b must be positive. In summary, for U-shaped long-run average cost curves, a must be zero, b and d must be positive, c must be negative, and 4db > c 2 . However, the conditions do ... unit of output. Average cost measures the input requirements per unit of output. Learning curve effects exist if average cost falls with increases in cumulative output. Here, average cost decreases...

Ngày tải lên: 23/12/2013, 14:15

... Competitive Supply 108 is everywhere above average variable cost so the firm will supply positive output at any positive price. e. At what range of prices will the firm earn a negative profit? ... Exercise 1. a. Derive the firm’s short-run supply curve. (Hint: you may want to plot the appropriate cost curves.) The firm’s short-run supply curve is its marginal cost curve above average variable ... revenues it receives are greater than its variable costs. Remember that the firm’s short-run supply curve is its marginal cost curve above the minimum of average variable cost. Here, average variable...

Ngày tải lên: 23/12/2013, 14:15

... they have convinced the government that price supports are in order. The government will therefore buy up as many jelly beans as necessary to keep the price at $1 per pound. However, government ... demand curve be of the general form Q=a+bP and the supply curve be of the general form Q=c+dP, where a, b, c, and d are the constants that you have to find from the information given above. To ... Analysis of Competitive Markets 125 c. If the United States imposes a tariff of $3 per pound, what will be the U.S. price and level of imports? How much revenue will the government earn from...

Ngày tải lên: 23/12/2013, 14:15

... marginal revenue curve. To find the marginal revenue curve, we first derive the inverse demand curve. The intercept of the inverse demand curve on the price axis is 18. The slope of the inverse ... output, and price. The average revenue curve is the demand curve, P = 700 - 5Q. For a linear demand curve, the marginal revenue curve has the same intercept as the demand curve and a slope that ... Suppose the average expenditure curve shifts from AE 1 to AE 2 , as illustrated in Figure 10.1. With the shift in the average expenditure curve, the marginal expenditure curve shifts from...

Ngày tải lên: 23/12/2013, 14:15