Why might the amount of fertilizer Farmer Jones puts on the corn fields not affect the corn
price or Jones' neighbor's profits? But if Cadilac offers a new fuel "economic V-8" how
come Lexus, BMW, Mercedes, Infinity, and Acura are affecte
Complete Problem # 1, 2, 3, 5, and 6 (p. 147-148).
A consumer has $400 to spend on goods X and Y
a) What is the market rate of substitution
Market Rate of Substitution=-Px/Py (Baye, p125)
b) Illustrate the consumer's
Complete Problems #11,18,23 (Page 149-152)
It is common for supermarkets to carry both generic (store-label) and brand-name (consumer-label) varieties of sugar and other products
S tore-Brand: $1
P roducer-Brand: $2
Complete Problem # 2, 5, 6, 15, 18, and 19 (p. 258-262)
An industry consists of three firms with sales of $200,000, $500,000, and $400,000
a) Calculate the Herfindahl-Hirschman Index (HHI)
Total Sales: $1,100,000.00
Economic Factors that Influence a Firm's Ability to
Firms can only thrive and endure with positive economic profits. If none exists,
shareholders and creditors will withdraw their support in search of higher (positive)
returns. Most firms take for
Revised_W1Pr1 (#1,2,3,5,7,8 @page 27-28)
In this situation, the rivalry we are dealing with is consumer-consumer rivalry.
reason this is not consumer-producer rivalry is in this case, even thought Levi
original producer of the item for sale
Complete Problem # 1, 2, 3, 5, 7, and 8 (p. 27-28).
Levi Strauss & Co.
In this case, it is a consumer-consumer rivalry. Regardless of whether Levi Strauss was the original manufacturer of the good, they are acting as a consumer in this scenario. Ebay i
Complete Problem # 12, 13, 15, and 17 (p. 28-30).
You are in the market for a new refrigerator
Model to Purchase:
Opportunity Cost %:
Energy Efficient Model
Arriving at and Defending Business Decisions
In business decision-making, the more complex the business and thus overarching the
decision, the more people are likely given responsibilities in information processing and
consulting. Marketers know marketing
Fundamentals of Managerial Economics
The goal of businesses is to maximize profits, .
Where is a function of the output level chosen, technology chosen, amount of input chosen,
pricing strategy adopted, responses to competitor's behaviors, willingness and
Formula (array formula in cells A7:B7)
Complete Problem # 1, 2, 5, 6, and 22 (p. 66-72).
The X-Corporation produces a good
When consumer incomes rise, demand for Good X will increase since it is a normal good. During this same period, demand for the inferior (nonnormal) good will decreas
Complete Problem # 2, 3, 9, 15, and 17 (p. 110-113)
The demand curve for a product is given by
a) What is the own price elasticity of demand when Px = $154
Own Price Elasticity of
Qdx = 1000 - 2Px + 0.02Pz
Own Price Ela
Workshop 2 Problems Set 2 (Pg 110-113) - W2Pr2
a. At the given prices, quantity demanded is 700 units: . Substituting the relevant
information into the elasticity formula gives: . Since this is less than one in absolute
value, demand is inelastic at thi
Workshop 2 Problems Set 1 (W2Pr1)
a. Since X is a normal good, an increase in income will lead to an increase in the
demand for X (the demand curve for X will shift to the right).
b. Since Y is an inferior good, a decrease in income will lead to an inc
Workshop 4 Problems Set 1 Answers (#1,4,5,6, 12*, & 13)
a. When K = 16 and L = 16, . Thus, APL = Q/L = 16/16 = 1. When K = 16 and L = 81, .
Thus, APL = 24/81 = 8/27.
b. The marginal product of labor is . When L = 16, . When L = 81, . Thus, as t
Complete Problem # 1, 5, and 12 (p. 191-194)
A firm can manufacture a product according to the production function
Q=F(K,L) = K3/4L1/4
a) Calculate the average product of labor, APL, when the level of capital is fixed at 16 units and firm uses 16 units
Complete Problem # 13 and 15 (p. 194-195)
You are a manager for Herman-Miller - a major manufacturer of office furniture. You recently hired an economist
Q = 2(K)1/2(L)1/2
Units of Capital
Workshop 3: Problems Set 1 - Answers
a. The market rate of substitution is .
b. See Figure 4-1 for guidance.
c. Increasing income to $800 (by $400) expands the budget set, as shown in Figure 4-1.
Since the slope is unchanged, so is the market rate of s
Workshop 3 Problems Set 2 (W3Pr2): Answers
All properties hold except Property 4-3 (Diminishing Marginal Rate of Substitution)
and Property 4-2 (More is Better)
Under the existing plan, a worker that does not goof off produces 3 copiers per hour
A Business' Constraints and Opportunities
Referring to our text's first page
Would you be willing to spend $20 million today for the right to receive $7 million
annually for the next three years? If you have nothing better to do with your $20 million,
The Nature of Industry and Marketplaces
Due to an array of entry barriers, varying degrees of power possessed by input
suppliers and buyers of products in the output market, and a myriad of strategic actions,
responses, and tactics within an industry, und
Market Concentration and Elasticity
With many firms supplying a similar product, or even a few firms furnishing a product
that buyers can gather large amounts of reliable information on, such that very few if
any information asymmetries exist, little mark
Quantitative Demand Analysis
We often times visit our favorite retailer and almost without thinking, as if by habit, walk
through a select number of aisles, select the "same old things," proceed to the
checkout, and without noticing the day's assigned pri