UNC COURSE ECN 321 – Explain and Graph an event

UNC COURSE ECN 321 – Explain and Graph an event

Chapter
10

1)
Explain and Graph an event which leads to higher prices and lower quantity
produced of a certain good.

2)
Explain and graph an event which leads to lower prices and lower quantity
produced of a certain good.

3)
Explain and graph an event which leads to lower prices and higher quantity
produced of a certain good.

4)
Explain and graph an event that leads to higher prices and a higher quantity
produced of a certain good.

Chapter
11-

1)
Suppose you have a property that you rent out for $50,000 a year. Property
taxes and utilities are paid by you and run $15,000 and $7000 respectively.
Another tenant has offered to pay $30,000 per year but will pay the taxes and
utilities. Assuming you decide to keep the existing tenant. Calculate accounting
profit.

Calculate
economic profit, assuming you keep the existing tenant. Did you make a wise
choice?

Chapter
12-

1)
Calculate the profit maximizing price for the following scenarios:

a) MC :
$35
E: – 3.45

b) MC:
$2.50
E: -1.05

c) MC: $350
E: – 35.50

2) The
market elasticity of a product is determined to be -.50. The following firms compete in this area:

Bob, Inc
– 22% market share

Bill,
Inc. – 18% market share

Jim, Inc.
– 20% market share

Calculate
the individual firm elasticity for each.

3) Using
the data from 2) assume that all 3 firms face a $10 MC calculate the profit
maximization price.

4) Bill,
Inc. has adopted lean management practices and reduced their marginal cost to
$9.00. What are the implications to the price they can charge and for the firm?


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