Homework 5

Homework 5 - Homework 5(Due at the start of class Please...

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Homework 5 (Due 10/22/07 at the start of class) Please write both your name and Section Number on your HW answers! 1. Chapter 13 Exercises: a. Within-Chapter Exercise 13A.2 b. Within-Chapter Exercise 13A.4 c. Within-Chapter Exercise 13A.5 d. Explain why it must be true that if technology is constant returns to scale, then the least costly way to double output is to double all inputs. (Hint: if a technology is constant returns to scale then it must be homothetic). 2. In Section 14.3 of Chapter 14, several possible scenarios that would change the behavior of firms and potentially the market equilibrium in an industry are discussed. Some of these match the situations discussed below. Others involve sunk costs or benefits that will change nothing. Some affect all firms, and some affect only a single firm. With this as background, indicate for each of the following situations how the price and quantity of “hero cards” change in my firm and in the industry as a whole. Assume that all firms in the “hero card industry” face identical costs and that the hero card industry is
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Homework 5 - Homework 5(Due at the start of class Please...

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