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In a private closed economy, the marginal propensity to consume is 0.25, consumption equals income at $120 billion, and the level of investment is $40 billion. what is the equilibrium level of inco
Discuss the IS-LM framework (determination of income and the interest rate) and the equivalent AD-AS framework (determination of price level and income).
Compute Ikonomia's gross national expenditure (GNE), gross national income (GNI) and gross national disposable income (GNDI).
Past experience has shown that an 80% learning curve applies to the labor required for producing these units. The time to complete the first unit has been estimated to be 1.76 hours. Find the estima
If the numbers of home and commercial users are equal, and you cannot distinguish between commercial and home users, what is the most profitable pricing strategy?
How does the bank's finding relate to economist's traditional focus on what people do, rather than what they say they will do?
The refinery sells the gasoline to a wholesaler for $1,500, who then sells it to a gas station for $1,700. The gas station sells it to customers for $2,500. In these transactions, how much has been a
Demand for a monopolist's product is estimated to be Qd = 100 - 2P and it's total costs are C(Q) = 10Q. Under first-degree price discrimination the optimal price(s), number of total units exchanged
Tourist have an elasticity of demand for a trip to Bahamas of -3. How much should an airline charge them for a ticket if the price it charges the general public is $360? Assume the general public h
Nick has an endowment of 20 x's and 75 y's which he can trade at the going prices. He has no other source of income. What is Nick's gross demand for x?
Write expressions for total revenue and marginal revenue as a function of the number of tickets sold and compute the profit-maximizing quantity of tickets.
Develop what you would consider to be a "fair" tax system for individuals and businesses. Explain its advantages and disadvantages and suggest appropriate policy prescriptions to deal with the pote
Calculate the deadweight loss from monopoly. For each option calculate the profit maximizing P and Q. Which if any of these schemes would alter the deadweight loss from monopoly? Explain.
Interpret this interval. Can we be 95 percent confident that p1 - p2 is less than 0? That is, can we be 95 percent confident that p1 is less than p2?
What will be the effect of the different tools of fiscal policy to stabilize the economy? Give an example of a built-in stabilizer and explain how it would work to reduce this rise or fall in the le
Let's assume that Monopolistically Competitive firms in a particular industry are earning short-run economic profits. What will happen? What will the end result be? Why won't a purely competitive fi
Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve, neither, or both. Which curve shifts, and in which direction?
What kind of strategy would you pursue so that when you increase the price of your product to generate profit margin, you're not going to experience significant fall off in volumes or revenues?
Pam AM has begun discussions with Sabre, Inc. to outsource engine overhaul. The plan is to begin the relationship in 2012. If Sabre, Inc. is less expensive, why doesn't Pam Am begin outsourcing imme
Defining demand and supply, why do you think economists focus on price while holding constant other factors that might have an impact on the behavior of buyers and sellers?
The number of units of Y she consumes. The price of good Y is 1. The price of good X used to be but is now 2. The equivalent variation of this price change for Kristina is?
Stockholders require a rate of return of 13 percent. What would you expect the price of each share to be today, and what is the value of the company's common stock?
The change in the nominal money supply causes a shift in the aggregate demand curve, whereas a change in the price level causes a movement along the aggregate demand curve. Explain.
Based on market research, a recording company obtains the following information about the demand and production costs of its new CD: Find the price P and quantity Q that maximizes the company's profi
His total costs each day are $280 of which $30 are fixed costs. He cuts 10 lawns a day. What can you say about Drew's short-run decision regarding shut-down?