How did the Social Security system influence the size of the budget deficit during 1985–2010? How will it influence the deficit during the next two decades? Is this a cause for concern? Why or why not? Does an increase in the national debt increase the supply of money(M1)? Can the money supply increase when the […]

In the context of the shareholder wealth-maximization model of a firm, what is the expected impact of each of the following events on the value of the firm? Explain why. a. New foreign competitors enter the market. b. Strict pollution control requirements are enacted. c. A previously non-union workforce votes to unionize. d. The rate

The Ajax Corporation has the following set of projects available to it: Ajax can raise funds with the following marginal costs: First $250 million 14.0% Next 250 million 15.5 Next 100 million 16.0 Next 250 million 16.5 Next 200 million 18.0 Next 200 million 21.0 Use the marginal cost and marginal revenue concepts to derive

The price elasticity of demand for personal computers is estimated to be−2.2. If the price of personal computers declines by 20 percent, what will be the expected per-centage increase in the quantity of computers sold?

If the marginal revenue from a product is $15 and the price elasticity of demand is−1.2, what is the price of the product? The demand function for bicycles in Holland has been estimated to be Q = 2,000 +15Y -5.5P Where Y is income in thousands of euros, Q is the quantity demanded in units,

What conceptual determinant of auto demand price elasticity is most closely associated with the differences in switching cost across the target customers in the “DirectMail Coupon at a Ford Dealership” example—low switching cost for the German couple who commute in an old Taurus and high switching cost for the older couple who drive Crown Vics?

Cascade Pharmaceuticals Company developed the following regression model, using time-series data from the past 33 quarters, for one of its non-prescription cold remedies: Y = –1.04 + 0.24X1 – 0.27X2 Where Y = quarterly sales (in thousands of cases) of the cold remedy X1 = Cascade’s quarterly advertising (× $1,000) for the cold remedy X2 = competitors’ advertising for similar

The following table presents data on sales (S), advertising (A), and price (P): a. Estimate the following demand models:  (i) S = α + β1A + β2P (ii) S = αAβ1Pβ2 b. Determine whether the estimated values ofβ1andβ2are statistically significant (at the 0.05 level). c. Based on the value of R2 and the F-ratio, which model gives

Ethanol is again viewed as one part of a solution to the problem of shortages of petroleum products. Ethanol is made from a blend of gasoline and alcohol derived from corn or sugarcane. What would you expect the impact of this program to be on the price of corn, soybeans, and wheat? Why invest capital

Charging $17.99 a month for an unlimited number of movie rentals (three at one time), Netflix revolutionized the movie rental business with a one-day mailing service for DVDs and acquired 12 million subscribers and $1.5 billion in revenue. However, Block-buster, the video rental giant from the earlier $5.5 billion bricks-and-mortar movie rental business, decided to