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You should have 8 graphs. The written answer should be set up under the graph as follows: Price: Increase/Decrease (select one) Quantity: Increase/Decrease (select one) Determinant: One of the determi
For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average variable cost (AVC), average total cost (ATC), and average fixed cost (AF
Suppose your local Congress representative suggests that the federal government intervenes in the gasoline market to stop runaway price increases. Would you say that this view basically supports the K
Assume that the consumption of schedule for a private open economy is such that consumption C = 50 + 0.8Y. Assume further that planned investment Ig and net exports Xn are independent of the level of
Sometimes market activities (production, buying and selling) have unintended positive or negative effects outside the market's scope. TI know that is an externality.
Suppose the government decides to decrease spending and increase taxes in an attempt to decrease its deficit. Is it possible for the Fed to ease the macroeconomic effects of the spending and tax chang
What is the new deficit? Explain carefully why the deficit is not zero. c. Suppose the F-L amendment was not in effect and planned investment falls to I = 55.What is the new value of GDP?
During 2003, we began to stop worrying that inflation was a problem. Instead, we began to worry about deflation, a decline in the price level.Assume that the Fed decided to hold the money supply const
Suppose Fred deposits $8,000 in cash into his checking account at the Bank of Bonzo. The Bank of Bonzo has no excess reserves and is subject to a 5 percent required reserve ratio.
If you assume that wealth (W) and investment (I) remain constant (we are ignoring the fact that saving adds to the stock of wealth), what are the equilibrium levels of GDP (Y), consumption (C), and sa
In a simple economy, suppose that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set of n
Define inflation.Assume that you live in a simple economy in which only three goods are produced and traded: fish, fruit, and meat. Suppose that on January 1, 2010, fish sold for $2.50 per pound, meat
Antonio, an accountant working for the city of Santa Cristina,decides to forego his annual vacation to Hawaii when word leaks out that the city may be cutting all employees’ salaries by 10 perce
Suppose the market demand for pizza is given by Qd = 300 - 20P and the market supply for pizza is given by , where (per pizza): Qs = 20P - 100
The nation passes a law requiring all employers to give their employees 16 weeks of paid vacation each year. Prior to this law, employers were not legally required to give employees any paid vacation
Does the principle of “increasing opportunity cost” hold in this nation? Explain briefly. (Hint:What happens to the opportunity cost of bread—measured in number of ovens—as bre
As long as all resources are fully employed and every firm in the economy is producing its output using the best available technology, the result will be efficient.”Do you agree or disagree with
Explain whether each of the following is an example of a macroeconomic concern or a microeconomic concern.
People who drive hybrid automobiles recycle their trash more than people who do not drive hybrids. Therefore,recycling trash causes people to drive hybrid automobiles.
The Confab Company spends $1 million to build a new branch plant that will probably be in operation for at least 10 years.Alex’s father owns a small grocery store in town. Alex works 40 hours a
How do you go about weighing the alternatives? Once you choose a most important use of time, why do you not spend all your time on it? Use the notion of opportunity cost in your answer.
Assume that (a) the price level is flexible upward but not downward and (b) the economy is currently operating at its full-employment output. Other things equal,how will each of the following affect t
The Fed has three main mechanisms to affect the economy through the money supply and interest rates: open market operations, the discount rate, and reserve requirments. In this assignment, you will wr
Banks try to keep their excess reserves at a maximum in order to maximize profits.2. The demand for reserves depends on income and the price level.
What is meant by monopolistic competition? Explain and critically analyse Chamberlin's theory of monopolistic competition.