Economics Homework Help

1. The Bungalow
Bill Accounting Service, LLC uses computer technology and data-entry operators
to provide accounting services in a competitive market. The price for each
statement is $200.  Total fixed costs are
$1500/week.
(10 points)

Data Entry Operators	# of Statements per week	Marginal Product	Total Revenue
0	0.0
1	5.0
2	9.0
3	12.0
4	14.0
5	15.5
6	16.5
7	17.0

How many
data entry operators would BBAS, LLC hire at a weekly wage of $250 if Bill were
attempting to maximize profits?

Determine
the firm’s profits.

Suppose a
decrease in demand reduces the market price to $150 per statement. 

Should Bill
stay open in the short run?  Why?

Should Bill
return to being a tiger hunter in the long run? 
Provide a brief explanation.

Firm	Market Share
AB InBev	40.6
Molson Coors	13.9
SABMiller	12.0
Constellation	6.0
Heineken	3.0
Yuengling	1.6
Dean Metro	1.5
Sam Adams	1.4
20 others @	1.0

2. As the lead research
economist for the Department of Justice, you need to determine the effects of a
proposed merger of AB InBev & Constellation.

(10 points)

What is the four-firm concentration
ratio before the merger?

b. What is the industry HHI
before the merger?

c. What is the industry HHI
after the merger? 

d. Explain your recommendation
for the merger (block or approve)? 

2. 
Suppose society consists of five families whose incomes are
$8,000, $12,000, $20,000, $40,000, and $80,000.

(5 points)

1. What is the total income in this society?

1. What percentage of total income is earned by the:

1) 
poorest quintile?

2) 
second quintile?

3) 
third quintile?

4) 
fourth quintile?

5) 
richest quintile?

1. Construct a Lorenz curve for this five-family economy.