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show what happens to the nominal interest rate and the equilibrium quantity of loans when both borrowers and lenders increase their estimates of the expected inflation rate from 5 percent to 10 perc
A mortgage company lends the Miller family $100,000 to buy a house worth $105,000. During the next year, there is deflation and all prices, including house prices, unexpectedly fall by 10%. 1. After
Assume that Maria Moneybags keeps $1000 in cash in her sock drawer. Over the first year, the inflation rate is 10%. What is the real inflation tax paid by Maria for this year. What is the real inflati
Maritime Insurance Company offers insurance policies for recreational boats. A typical policy will pay the replacement cost of $25,00 if the boat is a total loss.If the boat is not a total loss but
Tennessee just instituted a state lottery. The initial jackpot is $100,000.00. If the first week yields no winners, the next weeks jackpot goes up, depending on the number of previously players who
Find the four-firm concentration ratios for the following industries: fluid milk (311511), women's and girl's cut & sew dresses (315233), envelopes (322232), electronic computers (334111).
The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage per worker is $80, and the price of the firm's output is $25. The cost of other variable inputs is $
During the 1980s, the U.S. Congress imposed a high sales tax on yachts, figuring that the rich could afford to pay for this luxury. But so many jobs were lost in the boat-building industry that the
The aggregate demand for cookies is perfectly inelastic. Quantity demanded is 10 cookies regardless of price. The aggregate supply of cookies is perfectly elastic. Quantity supplied is 0 if the pric
"We should impose a 20 percent luxury tax on expensive automobiles (those with a sales price of $50,000 or more) in order to collect more tax revenue from the wealthy." Will the burden of the propos
The financial advisor is weekly column in the local newspaper. Assume you must answer the following question: "I recently retired at age 65, and I have a tax-free retirement annuity coming due soon.
(A)if the price of a serving pasta is $4,how many servings will Mr.A buy How much consumer surplus he receive (B)The following week,he come back and the price of a serving pasta is $6,How much consu
Suppose that a tax of T is placed on buyers, so the new demand equation is QD = 300 - (P + T). Solve for the new equilibrium. What happens to the price received by sellers, the price paid by buyers, a
Delta Software earned $10 million this year. Suppose thegrowthrate of Delta's profits and the interest rate are bothconstant and Delta will be in business forever. Determine the value of Delta Softw
You are the manager of a firm that receives revenues of $ 30,000 per year from product X and $ 70,000 per year from product Y. The own price elasticity of demand for product X is -2.5, and the cross
Suppose the own priceelasticity of demand for good X is -2, its income elasticity is 3,its advertising elasticity is 4, and the cross- price elasticity ofdemand between it and good Y is -6.
Various financial data for 2007 and 2008 follow. Calculate thetotal productivity measure and the partial measures for labor,capital, and raw materials for this company for both years. What do these
Over another range of prices, the price elasticity of demand varies from 1.5 to 0.75. What can you say about total revenue and the total revenue curve over these two ranges of demand curve as price
the short-run price elasticity of demand for tires is 0.9. If an increase in the price of petroleum (used in producing tires) causes the market prices of tires to rise from $50 to $60, by what perc
The average waiting time to be seated for dinner at a popularrestaurant is 23.5 minutes, with a standard deviation of 3.6minutes. Assume the variable is normally distributed. When a patronarrives at
If planned investment = 100 Government purchases and taxes are both 50 Then calculate the equilibrium level of income.Where r is the interest rate in percentage, money supply (M)is 1000 and the price
Dave is buying pizza and soda. Suppose that a slice of pizza anda can of soda each cost $4 Let E be the amount in dollars that Dave spends onpizza and soda. If Dave buys P slices and S cans ofsoda,
The online bookseller wants to increase its total revenue by offering 10% discount on every book it sells.Its custmers are divided in 2 groups Group A and group B Volume of sales before the discount
Price index = (cost of market basket today / cost of marketbasket in base year) * 100 Nominal rate of interest = 7% Expected inflation rate = 5% Real rate of interest = 2%
An asset, purchased three years ago for $20,000, can be replaced by a new type of equipment. The market value of the old machine is currently $13,000 and will be $9,000, $8,000, $6,000, $2,000, and