Division X makes a part with the following characteristics:
Production capacity 33,500 units
Selling price to outside customers $ 35
Variable cost per unit $ 28
Fixed cost, total $ 108,500
Division Y of the same company would like to purchase 10,085 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $34 each. Suppose Division X has ample excess capacity to handle all of Division Y's needs without any increase in fixed costs and without cutting into sales to outside customers.
Required:
1. If Division X refuses to accept the $34 price internally and Division Y continues to buy from the outside supplier, the company as a whole will be .
Multiple Choice:
a. worse off by $70,595 each period.
b. better off by $10,085 each period.
c. worse off by $60,510 each period.
d. worse off by $20,170 each period.
e. better off by $60,510 each period.

The average daily foreign exchange trading by banks around the world is closest to $ a. 1.5 trillion b. 1 trillion c. 600 billion d. 700 billion e. 1.3 trillion

Suppose a firm faces a fixed price of output, 푝푝= 1200. the firm hires workers from a union at a daily wage, 푤푤, to produce output according to the production function 푞푞= 2퐸퐸12. there are 225 workers in the union. any union worker who does not work for this firm is guaranteed to find nonunion employment at a wage of $96 per day. a.what is the firm’s labor demand function? b.if the firm is allowed to choose 푤푤, but then the union decides how many workers to provide (up to 225) at that wage, what wage will the firm set? how many workers will the union provide? what is the firm’s output and profit? what is the total income of the 225 union workers? c.now suppose that the union sets the wage, but the firm decides how many workers to hire at that wage (up to 225). what wage will the union set to maximize the total income of all 225 workers? how many workers will the firm hire? what is the firm’s output and profit? what is the total income of the 225 union workers? [hint: to maximize total income of union, take the first order condition with respect to w and set equal to 0.]

Plastic and steel are substitutes in the production of body panels for certain automobiles. if the price of plastic increases, with other things remaining the same, we would expect: a) the demand curve for plastic to shift to the left. b) the price of steel to fall. c) the demand curve for steel to shift to the left d) nothing to happen to steel because it is only a substitute for plastic. e) the demand curve for steel to shift to the right