Long term and short term decisions.

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Answer 1

Question

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

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Answer 3

Question

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

Answer 6

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.

Economics Concept Introduction

Short run: The short run refers to the time period, which does not allow a change in the capital to adjust to the market situation.

Long run: The long run refers to the time, which changes the production variable to adjust to the market situation.

Answer 7

Chapter 11, Problem 1SPA

To determine

Long term and short term decisions.

Answer 8

Expert Solution & Answer

Explanation of Solution

Laying off 44,000 retail workers in 2016 and scaling back premiere locations by the M’s store can be seen as a short run decision because only one factor of production, which is the labor is affected by the decision.

W store is shutting down its 629 stores and Amzn Company and other online retailers expanding can be seen as long run decisions as it affects all the factors of production. For instance, shutting down the retail stores implies a reduction in the size of all the factors of production say labor, capital and so on. Moreover, closing 15 percent department store without another job offer to closed store employees is also a long run decision as it affects all the factors of production.