Economics 32 discussion of question/answers

[Mattman]

I don't think there's an answer abt that

 

[Mattman]

My reasoning is that a firm which grows fast maximizes it's output, AR=AC, so profits to stockholders are minimal

 

[parthrocks]

What's characteristic of a rapidly growing firm

Was it some dieconomies of scale!!??
shanky631

 

[Mattman]

Wasn't that another question, about the firm building one more identical plant

 

[parthrocks]

My reasoning is that a firm which grows fast maximizes it's output, AR=AC, so profits to stockholders are minimal

what about the dieconomies of scale that it experinces like as it grows beyong certain size!!!the communication problem leads to workers demotivation and so the labour turnover increases!!

 

[parthrocks]

Wasn't that another question, about the firm building one more identical plant

Ya ya that I agree that was managerial dieconomies of scale for the manufacturing firm
a one more question was ther answer was labour turover incresases something like that???

 

[Mattman]

Ya ya that I agree that was managerial dieconomies of scale for the manufacturing firm
a one more question was ther answer was labour turover incresases something like that???

There was such an answer, but I don't think it's correct

 

[shanky631]

but i think it was reduced profits available for distribution to shareholders. because a rapidly growing firm will keep more retained profits with itself for expansion.

 

[shanky631]

increased labour turnover is possible. but the term usually was mentioned in the question!!!! so i think reduced profits was the answer

 

[parthrocks]

i think increase in economic profit was D (xyz).
hey when unemployment is below natural rate, shouldn't actual output be above the potential output.

Exactly!!!

 

[Mattman]

Hey whats your answer for number 30?

how were my other answers

 

[parthrocks]

increased labour turnover is possible. but the term usually was mentioned in the question!!!! so i think reduced profits was the answer

But its quite evident from the 2nd chapter that lays an emphasis on the economies of dieconomies of scale!!clearly mentioned there!!also ya bro and also labout turnover can also be usually!!its impossible to allocate time periods!!so thats why!!

 

[shanky631]

butt not enough evidence was der in the question to support that workers were unhappy. some workers also get increased pay. so why will labour turnover increase necessarily???

 

[shanky631]

Hey whats your answer for number 30?

how were my other answers

i wrote the same answer taxation must be raised by more than 10 million.

 

[Mattman]

what about number 28? about why an injection of 10 million results in an increase in GDP of less than that

 

[parthrocks]

Hey whats your answer for number 30?

how were my other answers

Ya eveything right!i guess except:-
1.actual output>potential output
2.and for the conecntration ratio are u saying that the answer was 25%market share each??????
3.and doubt in that labour turover!!

 

[Mattman]

But its quite evident from the 2nd chapter that lays an emphasis on the economies of dieconomies of scale!!clearly mentioned there!!also ya bro and also labout turnover can also be usually!!its impossible to allocate time periods!!so thats why!!

a firm with growth can experience economies of scale also anyway

 

[parthrocks]

i wrote the same answer taxation must be raised by more than 10 million.

what were the other options?

 

[Mattman]

Ya eveything right!i guess except:-
1.actual output>potential output
2.and for the conecntration ratio are u saying that the answer was 25%market share each??????
3.and doubt in that labour turover!!

no i meant the 4 firms altogether only have 25% of the market

 

[shanky631]

for that one i wrote bcoz of marginal propensity to consume. B option. but i am not sure, u may be right also bcoz A was also very close.