Economics question

1. Draw a line diagram illustrating the capital-labor decision once a de- sired level of output has been determined. Show how the desired levels of capital and labor will change if rent becomes relatively cheaper than wages. Show how the diagram changes if a higher level of output is desired.
2. Draw a line diagram illustrating the risk-return frontier. State the axiom that follows from the upward slope of the line. Why is the line called a frontier? What is the implication of the risk-return frontier flattening out as it moves from left to right?
3. Draw a line diagram to illustrate how reducing output below what would be provided in a competitive market situation can increase prof- its to a monopoly.
4. Draw a line diagram to show reaction functions for two firms operating in an oligopolistic market with products that differ mostly due to branding.
5. Briefly describe the four types of business structures that can be used to organize agribusinesses and farms. List the similarities and differences of the structures.

Sample Solution

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