identical to that of a perfect competitive f… Show more; ; An oligopolistʹs demand curve is: Answer

Investors know for sure that the CEO of firm A will undertake an investment that will yild $100 mill… Show more Investors know for sure that the CEO of firm A will undertake an investment that will yild $100 million profit next year and then $2 million each year after that for 10 years. They also know for sure that the CEO of firm B will undertake an investment that will yield nothing for two years and then a profit of $20 million per year for 10 years. 3) The investors in exercise 2 are surprised by firm’s performance in year 5. Instead of being $20 million, the firm’s profits are $40 million. What happens to firm B’s stock price in year 6 and 7? • Show less

A competitive firm uses two inputs and has a production… Show more Please explain how you got your answers! 🙂 A competitive firm uses two inputs and has a production function f(x1,x2)=4L^1/2M^1/2, where L is the number of units of Labor, and M is the number of machines used. The cost of labor is $16 per unit and the cost of machines is $4 per unit. a) Does this production function exhibit increasing, decreasing, or constant returns to scale? Explain why. b) Calculate the marginal product of inputs x1, and x2. c) What is the ratio fo x1 to x2 required to produce the output in the cheapest way possible? d) How many units of x1 and x2 will the firm use to produce y units of the output? e) What is the cost of poducing y units of the output for this firm? • Show less

A competitive firm has total cost function c(y)=5y^2+1,12… Show more PLease explain how you got your answers!:) A competitive firm has total cost function c(y)=5y^2+1,125. a) calculate the firms marginal and average cost functions. b) Draw the marginal and average cost functions on a graph. c) What is the minimum price at which the firm would be willing to supply a positive amount of output in the short run? Label this on your graph. d) Write down the firm’s short run supply function. • Show less

Nancy has a production function f(x sub1) (x sub2)=x sub… Show more PLease explain how you got your answers! 🙂 Nancy has a production function f(x sub1) (x sub2)=x sub1+4xsub2. The price of the first input (xsub1) is $12 and the price of the second input, (xsub2), is $8. a) Does this production function exhibit increasing, decreasing, or constant returns to scale? Explain. b) How many units of x1 and x2 will Nancy use to produce 30 units of output in the cheapest way? How much will it cost her? c) What is the cost function associated with producing y units of output? d) Assume now that input prices are (w1,w2). What is the cost function associated with producing y units of output? • Show less

The domestic demand function for portable radios is give… Show more PLease explain how you got your answers! 🙂 The domestic demand function for portable radios is given by Q=5,000-100P, where price (p) is measured in dollars and quantity is measured in thousands of radios per year. The domestic supply curve for radios is given by Q=150P. Suppose portable radios can be imported at a world rpice of $10 per radio. a) If trade were completely free, how many radios would be imported? b) The government imposed a $5 tariff on portable radios. How would this atriff change the market equilibrium? How many radios would be imported? c) What is the change in net producer’s surplus resulting fromthis tariff? d) what is the change in net consumer’s surplus resulting from this tariff? e) What is the deadweight loss resulting from this tariff? f) Instead of imposinga tariff, the government reached an agreement with foreign suppliers to “voluntarily” limit the portable radios they export to 1,250 per year. What is the deadweight loss resulting from this agreement? • Show less

Georgia consumes only grapefruits and pineapples. H… Show more Please explan how you arrived at your answers 🙂 Georgia consumes only grapefruits and pineapples. Her utility function is U(x,y)=x^2y^8, where x is the number of grapefruits consumed and y is the number of pineapples consumed. Georgia’s income is $105, and the prices of grapefruits and pinapples are $1 and $3, respectively. a) write down Georgia’s budget constraint. What is the slope of the budget line? b) What is Georgia’s marginal rate of substitution at the point (x,y)? c) How many grapefruits will she consume? d) how many pineapples will she consume? e) If her income increases to $120, how many grapefruits will she consume? Are grapefruits a normal or inferior good? • Show less

If the MPC is 0.8 and the government spending decreases by P million, then equilibrium GDP will decr… Show more If the MPC is 0.8 and the government spending decreases by P million, then equilibrium GDP will decrease by: A. $40 million B. $50 million C. $200 million D. $250 million • Show less

(p.523). Using a spreadsheet like the following, entering formulas for the total revenue and consume… Show more (p.523). Using a spreadsheet like the following, entering formulas for the total revenue and consumer’s surplus, and given the following demand curve of a consumer for a monopolist’s product Q=14-2P (a) find the total revenue of the monopolist when it sells 6 units of the commodity without practicing any form of price discrimination What is the value of the consumers’ surplus? (b) What would be the total revenue of the monopolist if it practiced first-degree price discrimination? How much would the consumers’ surplus be in this case? (c) What if the monopolist charged P= $5.50 for the first 3 units of the commodity and P= $4 for the next 3 units—What type of price discriminiation is this? • Show less

1) Investors know for sure that the CEO of firm A will undertake an investment that will yild $100 m