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Suppose the elasticity of deamnd for cereal is 1.If cereal increases in price by25%, how much will the quantitiy demanded decrease by?
Keyenes consumption function appears to explain consumption over the short run but not consumption over the long run - why?
In the two sector economy where there is no personal tax,how is personal income related to personal consumption expenditures and personal savings?
GDP rises from 6 trillion in 2001, base year, to 12 trillion in 2008. the gdp deflator is 180. Find real GDP in 2008. Find the percentage increase in real gdp between 2001 and 2008.
If the market-clearing price is 6, obtain the profit maximising level of output.
A monopolist faces the demand curve Q = 60-P/2. The cost function is C=Q2. Find the output that maximises this monopolist’s profits. What are the prices at profits and that output? Find the elas
In comparing two otherwise identical industries X and Y, an economist finds that labor demand is more elastic in industry X. Which of the following would support this finding?
U.S. real gross domestic product increased from $10 trillion in 2000 to $15 trillion in 2010. During that same decade the share of manufactured goods (e.g., cars, appliances) fell from 16 percent to 1
Briefly explain how each of the following changes the money supply.a. the central bank buys bonds b. the central bank raises the discount rate
Give two example of a negative externality and two examples of a positive externality Explain why market outcomes are inefficient in the presence of externalities.
What is the optimal level of production of wine decanters and what is the marginal revenue from the last wine decanter sold and what are the total revenue, total cost, and net benefit (profit) from se
Amos Excavating Inc. is purchasing a bulldozer. The equipment has a price of $100,000. The manufacturer has offered a payment plan that would allow Amos to make 10 equal annual payments of $15,582, wi
Define carefully what is meant by a demand schedule or curve. State the law of downward-sloping demand. Illustrate the law of downward-sloping demand with two cases from your own experience.
Suppose the total benefit derived from a given decision, Q, is B(Q) = 25Q - Q^2 and the corresponding total cost is C(Q) = 5 + Q^2, so that MB(Q) = 25 -2Q and MC(Q) = 2Q.
Because of a recession, the inflation rate expected for the coming year is only 3%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 3%.
Assume that the real risk-free rate, r*, is 4% and that inflation is expected to be 8% in Year 1, 6% in Year 2, and 4% thereafter. Assume also that all Treasury securities are highly liquid and free o
One assumptions made in developing international feature effect is that all investors inall countries require the same real return.what does this?
Suppose the supply function is Q=4P^2 and equilibrium quantity=36.What is the price elasticity of supply? What are the steps to find this?
If the price of one of the bundles of good rises, what information is needed to calculate the impact on demand for each of the bundles of goods?
What are the problems faced in determining the demand for a durable good? Illustrate with example of demand for households refrigerator or television set.
If the fed does not respond to this event what will happen to the price level?
After economics class one day, your friend suggests that taxing food would be a good way to raise revenue because the demand for food is quite inelastic.
Economists have observed that spending on restaurant meals declines more during economic downturns than does spending on food to be eaten at home. How might the concept of elasticity help to explain t
You worked for extra pay on a holiday and therefore missed out on your neighbors’ barbeque. People face trade-offs. You had to miss the barbeque to get something else that we liked.