Questions from Managerial Economics


Q: The widget market is competitive and includes no transaction costs. Five

The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $30, $29, $20, $16, and $12. Five buyers are willing to buy o...

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Q: On Valentine’s Day, the price of roses increases by more than

On Valentine’s Day, the price of roses increases by more than the price of greeting cards. Why? (Hint: Consider what makes roses and cards different and how that difference might affect supply’s respo...

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Q: The “A” index is a proxy for the world price

The “A” index is a proxy for the world price of cotton. From January 2010 to October of 2010, the price reflected by the “A” index increased about 80%. a. Provide two separate explanations for this...

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Q: Due to the H1N1 flu outbreak, the demand for hand sanitizer

Due to the H1N1 flu outbreak, the demand for hand sanitizer tripled. Should Johnson & Johnson increase production of their Purell hand sanitizer? Should it invest in doubling production capacity?

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Q: a. In the accompanying diagram (which represents the market for

a. In the accompanying diagram (which represents the market for chocolate candy bars), the initial equilibrium is at the intersection of S1 and D1. Circle the new equilibrium if there is an increase i...

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Q: Indicate whether the following changes would cause a shift in the demand

Indicate whether the following changes would cause a shift in the demand curve for Product A and, if so, the direction of the shift. Change Demand Curve Shift? Direction of Shift?  Increase in pr...

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Q: All of the costs associated with a principal interacting with an agent

All of the costs associated with a principal interacting with an agent are called a. opportunity costs b. agency costs c. monitoring costs d. sunk costs

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Q: Describe the difference in economic profit between a competitive firm and a

Describe the difference in economic profit between a competitive firm and a monopolist in both the short and long run. Which should take longer to reach the long-run equilibrium?

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Q: Describe an important difference in the way an economist and a businessperson

Describe an important difference in the way an economist and a businessperson might view a monopoly.

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Q: At a university faculty meeting in 2012, a proposal was made

At a university faculty meeting in 2012, a proposal was made to increase the housing benefits for new faculty to keep pace with the high cost of housing. What will likely be the long-run effect of thi...

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