The regulatory welfare state in pension markets: mitigating high
... regard to low-income savers, who can be expected to pay higher charges due to their weaker
market power and lower financial literacy. This is a policy problem that regulators in many
countries are increasingly struggling with (OECD, 2009: 144)
In this article we ask, therefore, whether pension regul ...
CAPITAL STOCKS, CAPITAL SERVICES AND
... This paper is concerned with the measurement of capital stocks, capital services and
depreciation in economic accounts. The values of these stocks and flows are all interdependent and
they must be measured consistently within a coherent economic theoretic framework. For purposes of
this paper, the c ...
NONCOOPERATIVE OLIGOPOLY MODELS Definition 1 (Oligopoly
... At this quantity the market price will be p = 1 - .001(360) = .64 which is higher than the duopoly price
of .52 and is higher than marginal cost of .28. Thus consumers are better off with the Cournot duopoly as
compared to the cartel solution. The total profits in the cartel are given by π = .64(360 ...
Eco 300 Intermediate Micro
... It is possible that after some point of output production, firm’s
average cost of production begins to increase.
This is because:
1. limited amount of factory/office space may constrain workers
when there are too many of them.
2. More difficulties arise for the oversight of a very large firm.
Interpreting economic data: estimating the elasticity of demand
... Let us first consider the estimates of the slopes of the expenditure functions given in the
first column of Table 2. From the table we see that all but two of these slope estimates are
positive. The two exceptions are the demand for Fuel and Power and the demand for
Tobacco. If we again interpret th ...
Long-Run Production and Costs
... first know the price of labor (w) and capital (pK). Suppose that the firm is paying fifty dollars
a day for each worker and twenty dollars for each shovel. Now calculate total costs for each
of the three methods of producing 15 units of output.
Method 1: Total Cost = w*L + pK*K = 50*5 + 20*5 = 250 + ...
... • Winchester Business School findings on use of asset finance by FTSE companies
• Case for change
• Implications of IASB’s proposals
• Is this the best solution?
linear break-even analysis: when is it applicable to
... guidance about the circumstances in which they can apply the analysis and they do not point
out situations where application of the analysis is definitely inappropriate. It is the purpose of
this short paper to rectify this deficiency. As will be seen, delineating the applicability of
linear break-e ...
... Cournot equilibrium: a pair of output levels, one for
each firm, which are such that after they are choose,
neither firm has incentive to change its output level.
(Cournot equilibrium is determined by the
intersection of the reaction curves)
Version A - Midterm #2 - November 15, 2008
... Note: this exam consists of 9 pages, including this cover page. Make sure that all 9
pages are included in your exam, and notify an invigilator immediately if any are
Practice Questions Week 6 Day 1
... store. Figure 7-1 shows the revenues and expenditures for his first year of operation. If Henry could have earned
$3,000 in interest on the money used to open the store, his economic profit would have been
7. The return to owners for innovatio ...
The Basics of Game Theory
... 2.2 Optimization in Cournot equilibrium
The Cournot model is a one period game, in which two firms produce an undifferentiated
product with a known demand curve. The two firms compete by choosing their respective level
of output simultaneously. Each firm chooses Q assuming their oppon ...
Individual and collective services
... • Individual services are services that government provides to
specific identifiable households. i.e. such as health and education
which are consumed by individual households.
• The distinction between individual and collective services is made
on COFOG classification
• All expenditure by NPISH is i ...
c. should produce 500 units of output instead, to earn
... 11-19 A competitive firm will maximize profit by producing the level of output at which:
the last unit of output produced adds the same amount to total revenue as to total cost.
the additional revenue from the last unit of output produced exceeds the additional cost of
the last unit by the lar ...
... Product differentiation may or may not
Barriers to entry
Chapter 6 - How Firms Make Decisions: Profit Maximization
... Every firm struggles to reduce costs, but there is a
limit to how low costs can go
These limits impose a second constraint on the firm
The firm uses its production function, and the prices
it must pay for its inputs, to determine the least cost
method of producing any given output level
For any le ...
... their joint profits by reducing production below the competitive level.
But, if a cartel is established it may be in the individual interests of each firm to cheat on
the cartel agreement by producing more to increase its individual profit.
Question: What might affect a firm’s temptation to cheat?
... • The total inflow of receipts from selling a
given amount of output
• Each time the firm chooses a level of
output, it also determines its total revenue
• Because once we know the level of output, we also
know the highest price the firm can charge
Week 5 – Production Theory
... minimum efficient scale (i.e. the point where economies of scale have been
fully exploited, as with 2000 pairs of shoes in the example above, which is the
same as the point of minimum average cost, as we shall see later) then it
should exhibit constant returns to scale from then on. However, if this ...
... The Firm’s Constraints: The
• Demand curve facing firm is a profit constraint
– Curve that indicates for different prices, quantity of
output customers will purchase from a particular firm
q - MSUMainEcon160
... than its avoidable cost.
This rule holds for all types of firms in both
the short run and the long run.
... Since K 9 , we get 18L 9 45 which implies that L = 36/18 = 2. Therefore
the firm’s total cost with this input combination is 4(2) + 5(9) = $53.
Building block model
The building block model is a form of public utility regulation that is common in Australia. Variants of the building block model are currently used in Australia in the regulation of electricity transmission and distribution, gas transmission and distribution, railways, postal services, urban water and sewerage services, irrigation infrastructure, and port access. The Australian Competition and Consumer Commission has stated that it intends to use a version of the building block model to determine indicative access prices for fixed-line telecommunications services. The building block model is so-called because the allowed revenue of the regulated firm is equal to the sum of underlying components or building blocks consisting of the return on capital, the return of capital (also known as depreciation), the operating expenditure, and various other components such as taxes and incentive mechanisms.