accounting department

  • a. Profits grow at an annual rate of 10 percent. (This one is tricky.)

Instructions: Round your responses to 2 decimal places.

b. Profits grow at an annual rate of 3 percent.


c. Profits grow at an annual rate of 0 percent.


d. Profits decline at an annual rate of 2 percent.


  • a. How much output is produced when K = 2 and L = 3?

    b. If the wage rate is $70 per hour and the rental rate on capital is $45 per hour, what is the cost-minimizing input mix for producing 9 units of output?


    c. How does your answer to part b change if the wage rate decreases to $45 per hour but the rental rate on capital remains at $45 per hour?
Capital increases and labor decreases.
Capital and labor increase.
Capital decreases and labor increases.
It does not change.  

  • Based on this information, what would be the nonpecuniary cost of legislation that would place a $0.75 cap on the fees banks can charge for noncustomer transactions?

    Instructions: Round your answer to the nearest penny (2 decimal places).


    What would be the full economic price of this legislation?


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