Questions from Managerial Economics


Q: A firm’s product sells for $4 per unit in a highly

A firm’s product sells for $4 per unit in a highly competitive market. The firm produces output using capital (which it rents at $25 per hour) and labor (which is paid a wage of $30...

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Q: Explain the difference between the law of diminishing marginal returns and the

Explain the difference between the law of diminishing marginal returns and the law of diminishing marginal rate of technical substitution.

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Q: An economist estimated that the cost function of a single-product

An economist estimated that the cost function of a single-product firm is, Based on this information, determine: a. The fixed cost of producing 10 units of output. b. The variable cost of producing 1...

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Q: A manager hires labor and rents capital equipment in a very competitive

A manager hires labor and rents capital equipment in a very competitive market. Currently the wage rate is $9 per hour and capital is rented at $10 per hour. If the marginal product of labor is 50 uni...

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Q: Compare the advantages and disadvantages of using spot checks/hidden video

Compare the advantages and disadvantages of using spot checks/hidden video cameras in the workplace and pay-for-performance pay schemes as means to influence worker performance.

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Q: Discuss the impact of the following factors on the optimal method of

Discuss the impact of the following factors on the optimal method of procuring an input. a. Benefits from specialization. b. Bureaucracy costs. c. Opportunism on either side of the transaction. d. Spe...

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Q: Suppose the marginal benefit of writing a contract is $100,

Suppose the marginal benefit of writing a contract is $100, independent of its length. Find the optimal contract length when the marginal cost of writing a contract of length L is: a. MC(L) = 30 + 4L....

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Q: Suppose the marginal cost of writing a contract of length L is

Suppose the marginal cost of writing a contract of length L is MC(L) = 40 + 3L. Find the optimal contract length when the marginal benefit of writing a contract is: a. MB(L) = 130. b. MB(L) = 170. c....

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Q: During the beginning of the twenty-first century, the growth

During the beginning of the twenty-first century, the growth in computer sales declined for the first time in almost two decades. As a result, PC makers dramatically reduced their orders of computer c...

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Q: DonutVille caters to its retirement population by selling over 10,000

DonutVille caters to its retirement population by selling over 10,000 donuts each week. To produce that many donuts weekly, DonutVille uses 1,000 pounds of flour, which must be delivered by 5:00 am ev...

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