Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Chapter ST8, Problem 3CQ
To determine
The earning difference of men and women.
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The table below provides the annual revenues and costs for a family-owned firm producing catered meals.
Total Revenues ($)
600,000
Total Costs ($)
- wages and salaries
250,000
-risk-free return of 7% on owners' capital of $300,000
21,000
- rent
101,000
- depreciation of capital equipment
22,000
-risk premium of 9% on owners' capital of $300,000
27,000
- intermediate inputs
146,000
-forgone wages of owners in alternative employment
-interest on bank loan
70,000
11,000
The implicit costs for this family-owned firm are
○ A. $70,000.
OB. $97,000.
OC. $589,000.
OD. $118,000.
○ E. $48,000.
Suppose a production function for a firm takes the following algebraic form: Q= 2KL - (0.3)L², where Q is the output of sweaters per day. Now suppose the firm is operating with 10
units of capital (K = 10) and 6 units of labour (L = 6). What is the output of sweaters?
A. 64 sweaters per day
OB. 49 sweaters per day
OC. 109 sweaters per day
OD. 72 sweaters per day
OE. 118 sweaters per day
3. Consider a course allocation problem with strict and non-responsive preferences. Isthere a mechanism that is efficient and strategy-proof? If so, state the mechanismand show that it satisfies efficiency and strategyproofness. {hint serial dictatorship and show using example}4. Consider a course allocation problem with responsive preferences and at least 3students. Is there a mechanism that is efficient and strategy-proof that is not theSerial Dictatorship? If so, state the mechanism and show that it satisfies efficiencyand strategyproofness.5. Suggest a mechanism for allocating students to courses in a situation where preferences are non-responsive, and study its properties (efficiency and strategyproofness). Please be creative
Chapter ST8 Solutions
Economics: Private and Public Choice
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