Chapter 7: The Costs of Production HW #7: Solutions QUESTIONS FOR REVIEW 8. Assume the marginal cost of production is greater than the average variable cost. Can you determine whether the average variable cost is increasing or decreasing? Explain. If the average variable cost is increasing (decreasing), then the last unit produced is adding more (less) to total variable cost than the previous units did, on average. Therefore, marginal cost is above (below) average variable cost. In fact
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A2 Economics 1. Explain why a monopoly has a downward facing marginal revenue curve and a firm in a perfect market has a horizontal marginal revenue curve. Monopolies are firms with a majority share in the market. Monopoly firms set the price because there is less competition and high barriers to entry/exit because of the high start up costs into the industry. So the demand curve is downward sloping because they set the price so to attract more demand they can lower the price. In a perfect
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general theory of income, output and employment in the wake of the Great Depression. Contents: Nature of Macroeconomics Difference between Microeconomics and Macroeconomics Dependence of Microeconomic Theory on Macroeconomics Dependence of Macroeconomics on Microeconomic Theory Macro Statics, Macro Dynamics and Comparative Statics Transition from Microeconomics to Macroeconomics Stock and Flow Concepts 1. Nature of Macroeconomics:________________________________________ Macroeconomics is the
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Question 1: Were the Berkshire’s motivations for a new incentive system reasonable? If so, what were their main options for a new system? Was an economic-focused system a reasonable choice? The use of accounting-based incentive system where EPS was a measure of performance had caused two concerns: 1. Agency problem: manager’s interests were not aligned with those of shareowners. While EPS had been improving steadily at the rate of 9% annually, share price had increased only slightly.
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1-a Total Cost = 4000+q 1-b Marginal cost means the cost added for each added customer=q Fixed cost is the cost charged no matter how many customers take the ride=4000 1-c-1 Patrons in group B are more sensitive to price change than group A. Example: Cloth industry. Some shoppers such as model or movie star need product for their career. Therefore, they will buy more products if the price gets lower because they can cut down their cost. On the other hand, some people just buy clothes when
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OLIGOPOLY An oligopoly is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated. Although only a few firms dominate, it is possible that many small firms may also operate in the market. Concentration ratios Oligopolies may be identified using concentration ratios, which measure the proportion of total market share controlled by a given number of firms. When there is a high concentration ratio in an industry, economists
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...........................................................03 REFERENCE ...................................................................................08 INRODUCTION 1] Description managerial economics relies on microeconomics and industrial organization to analyze business practices and design business strategies 2] Description the difference between price-taking and price-setting firms. ABSTRACT Overview of industrial
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DEC 5018 MICROECONOMICS Group Assignment Guideline Prepared by: Mr. Tai Hen Toong Group Assignment • This assignment is designed to develop learners’ ability to apply the important concepts and effects of a commodity price change in the market. Instructions • Students are required to: • Find THREE article from the Internet / local newspaper OR magazine related to a commodity price change in Malaysia. (Rubber, Palm oil & Fuel etc) • The article must be from July 2014 to July 2015
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Chapter 01 The Fundamentals of Managerial Economics Multiple Choice Questions 1. The higher the interest rate: A. the greater the present value of a future amount. B. the smaller the present value of a future amount. C. the greater the level of inflation. D. none of the statements associated with this question are correct. 2. If the interest rate is 10% and cash flows are $1,000 at the end of year one and $2,000 at the end of year two, then the present value of these cash flows
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Project Part 1 Matthew Gist ITT Microeconomics ES2550 Roger Lignugaris April 19, 2015 Project Part 1 A. Does the United States have a comparative advantage in wingdings? Explain. It is cheaper to import wingdings than it is to produce them. If the US had a comparative advantage in wingdings, we would export them. Comparative advantage is that the countries with a comparative advantage in a certain good will specialize in and export that good. B. Discuss the effect of the tariff
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