Managerail Economics Research Paper Example | Topics and Well Written Essays - 750 words

Managerail Economics - Research Paper ExampleObviously C&D and E&F ar smaller than A&B.2. The cross price elasticity of demand measures the reactivity of the demand for one good to a change in the price of another good (Mankiw). In the assignment, pryucts A and B are substitutes since the cross-price elasticity is postive, at +3.6. Products C and D with cross price elasticity of 5.4 are also substitutes. When the cross price elasticity is positive,it means that the demand for labouruct 1 increases as the price of the other good increases,threfore they are substitues.MU of prod A/price of prod A = MU of prod B/price of prod B = MU of prod C/price of prod C = MU of prod D/price of prod D = MU savings/price savings, which is equal to 36/$18 = 12/$6 = 8/$4 = 2/$1. The marginal utility divided by the price is equals to 2.4. What are given Income from pottery sales = $ 72,000CostsHelper = 12,000/ yearyield on the $40,000 if invested = $4000/year subscribe = 5000/yearsalary as a potter = $15,000/yearMaterials = $ 20,000/yearEquipment = $40,000Entrepreneurial Talent = $3000Acccounting make (1st year)= $72,000 - 12,000 - 5000 - 20,000 -40,000 = -5000On the second year if there is no purchase of equipment = $72,000 - 12,000 - 5000 - 20,000 = $35000Economic profit = $72,000 - 12,000 - 5000 - 20,000 -40,000-3000-4000-15,000= -$27,000On the 2nd year if there is no purchase of equipment = $72,000 - 12,000 - 5000 - 20,000 -3000-4000-15,000 = $13000Referenceshttp//www.crawfordsworld.com. 23 April 2010 .Mankiw, N. Gregory. Principles of Macroeconomics. 3rd. South-Western College Publishing,