Subject : Managerial Economics (102) Case No: 05 Objective: a) To apply the concept of elasticity of demand b) To correlate elasticity with decision making University fees – part I President Jones of Indian Institute of Business Economics (IIBE) is concerned about the financial state of his institution. Last year there was a loss of Rs.1.5 million and the trustees are getting restless. Currently there are 1000 full-time students‚ 700 of whom are degree students from their country
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reserves (1) – recognition of position (1)‚ explanation of sources (2). (b) Suppose a country has a surplus on its current account. Explain how this may affect its exchange rate. [3] Fall in supply of domestic currency to buy imports (1)‚ rise in demand for
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Q. 1. The accompanying table gives part of the Supply schedule for personal computers in United States. Price of Computer($) Quantity of computer supplied 1100 12000 900 8000 a) Calculate the Price elasticity of supply(PES) when the price increases from $900 to $1100 b) Suppose firms produce 1000 more computers at any given price due to improved technology. As the price increases from$900 to $1100‚ is the PES now greater than‚ less than or the same as it was in part(a) Q2. According
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pursuing a career as a doctor and on the best location to practice medicine. She got wind that I am currently taking a business course in economics and decided to e-mail me for information on the market for physicians in terms of supply and demand‚ elasticity‚ costs of production‚ pricing‚ and economic profit and loss. As a caring uncle‚ I definitely recognize the significance of choosing a career in medicine. I truly want Jenny to be armed with the most valuable and pertinent information on the
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dollar price? To answer this question‚ the price elasticity of demand must be known for the Porsche Carrera. If the car is relatively inelastic‚ the company can count on high exchange rate pass-through. Meaning‚ that the Porsche may keep the profit margin by increasing the price of the car as the U.S. dollar weakens in relationship to the Euro. If the car has elastic demand‚ meaning that price elasticity is less than 1‚ the car maker will have to reduce margin in order to keep price constant
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final examinations - A chance you will not do as well on your exams. 3. Farmer Fred could grow wheat and barley. He could grow 75 bushels of wheat or 125 bushels of barley using the same resources on an acre of his land. The price of wheat is $2.00 per bushel and the price of barley $ 0.80. Show the benefits to Fred from specialization. What should he specialize in? The 125 bushels of barley because even though it’s cheaper there are more of a supply and more people will by the cheaper product
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Energy Politics Issue XV1: Winter 2008 Table of Contents Economics Energy Policy and Ecomics’ Understanding Crude Oil Prices By James D. Hamilton 4 Government Business People Nuclear Fuel Banks By Danila Bochkarev 37 Forecasts on Saudi Arabia Liquids Production By Jean Laherrere 62 Four Dozen Chinese Rigs are in te U.S. Land Market With Dozen More Planned By Kathy Kemper 82 Regular Features Peak Oil and the Second Great Depression By Colin Campbell 85
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stricter laws when purchasing alcohol out in public but‚ people could still drink before they get there. It is hard to control the intake of alcohol people consume because it can come from different places. Analyze how prescription drugs affect the demand and supply of other products and services in this country In today’s society‚ a high percentage of the population requires prescription drugs to treat injury or illness. In some cases‚ the need for drugs may be short term because of an injury of
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true? (a) A profit maximising monopolist will always set price and output at a level where demand is price elastic. X (b) A profit maximising monopolist always produces where Average Revenue equals Average Cost (c) A profit maximising monopolist will‚ in long run equilibrium‚ always use a scale of plant that minimises long run Average Costs. (d) A profit maximising monopolist will always produce where marginal cost is greater than price. Question 2 Assume two rival car rental companies (Ace Rentals
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Price elasticity: products with high quality or being highly processed tend to be inelastic demand‚ while row materials are usually elastic. For example‚ a price increase in a car only leads to little decrease in demand‚ in the contrary; a price increase in oil could leads to huge change in market. Market-skimming pricing: two examples came to my mind when I saw this concept‚ Samsung and Apple. As I know that‚ Samsung often set an extremely high price when they release a new cellphone‚ after few
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