Economics for business

1. What are two reasons economists support free trade? 2. One of the basic economic laws is "the law of one price." It says that given certain assumptions, one would expect that if free trade is allowed, the prices of goods in countries that trade with each other should converge. a. Can you list what three of those assumptions likely are? b. Should the law of one price hold for labor, also? Why or why not? c. Should it hold for capital (financial resources) more so or less so than for labor? Why or why not?

Economics and Management Review Questions

1. When the exponents of a Cobb-Douglas production function sum to more than 1, the function exhibits A. Constant returns B. Increasing returns C. Decreasing returns D. Either increasing or decreasing returns 2. A major advantage of the ___________ production function is that it can be easily transformed into a linear function, and thus can be analyzed with the linear regression method. A. Cubic B. Power C. Quadratic D. None of the above 3. If a firm used a combination of inputs that was to the left of the isocost line, it would indicate that A. It is exceeding its budget. B. It is not spending all of its budget. C. It is operating at its optimal point be... click for more

Short Run Economics

At a product price of $56, will this firm produce in the short run? Why or why not? If it is preferable to produce, what will be the profit-maximizing or loss minimizing output? Explain. What economic profit or loss will the firm realize per unit of output? Total Average Average Average Marginal Product Fixed Cost Variable Cost Total Cost Cost 0 1 $60.00 $45.00 $105.00 $45 2 30.00 42.50 72.50 40 3 20.00 40.00 ... click for more

Short Run Supply Schedule

a-Complete the short-run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3) 1 2 3 4 Price Quantity Supplied Profit(+) Quantity Supplied Single Firm or Loss(-) 1500 Firms $26 32 38 41 46 56 66 b-Now assume that there are 1500 identical firms in this competitive industry: that is, there are 1500 firms, each of which has the cost data shown in the table. Complete the industry supply schedule (column 4) Se... click for more

Equilibrium Price

Suppose the market demand data for the product are as follows: Price Total Quantity Demanded $26 17,000 32 15,000 38 13,500 41 12,000 46 10,500 56 9,500 66 8,000 What will be the equilibrium price? What will be the equilibrium output for t... click for more