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By definition, the budget deficit equals the rate of change of the amount of debt outstanding: δ(t)=?(t). Define d(t) to be the ratio of debt to output: d(t)=D(t)Y(t). Assume that Y(t) grows at a constant rate g>0.
(a) Suppose that the deficit-to-output ratio is constant: δ(t)Y(t)=a, where a>0.
(i) Find an expression for ?(t) in terms of a, g, and d(t).
Cost are represented by the equation C=10L+4K. Draw one isoquant and one isocost curve on a labour/capital frontier that show the cost-minimizing L and K required to produce Q=10. Label axes, curves, intercepts, and the cost-minimizing amounts of lab..
Many automobile manufacturers routinely advertise the safety of their cars, yet airlines generally do not even mention safety in their advertising. Can you suggest an explanation for this difference?
What are the MPC and APC all about? Compare and contrast these concepts? is it better to have a high propensity to consume or lower? Which people fit the high versus the low category?
The demand for cars in Home is q = 30 – P and the supply of cars in Home is q = P. The demand for cars in Foreign is q=10–P and the supply of cars in Foreign is q = P. Calculate the autarky equilibrium price and quantity in each country. Who is the i..
Assume that the airline industry is characterized as a duopoly in which two firms produce identical products. American Airlines’s marginal cost of is $90.00, while United’s marginal cost is $180.00. If the two firms compete by choosing quantities sim..
Let the inverse demand curve be p(q) = a − bq. Suppose there are two firms, with constant marginal cost equal to C. What are the equilibrium strategies of the two firms under the assumption the entire market is served.
Some personal computer software is sold at special discounts to students. Other software is provided in a less powerful version for students. Why do publishers offer discounts to students? What is the purpose of developing less powerful editions?
The market for autographs by a superstar baseball player during the 1950s and 1960s indicates that while the player’s autograph is not rare it remains highly desirable and of relatively high price to collectors. Use one graph to show both the demand ..
An individual likes owning cars is better. In order to own a car, an individual must have a 1:4 ratio of frames to tires.
Elucidate what does this imply about the use of monetary and fiscal policy over the business cycle.
Why would the global campaign halt the spread of the imitated medicines. With the cost of innovation and the necessity to achieve economies of scale, the pharmaceutical industry is continuously re-organizing on a worldwide scale. Explain in detail.
What are the major federal laws and subsequent amendments underpin U.S. environmental protection. Identify these laws. The value of a home depends in part on how attractive other homes and yards in the neighbourhood are. How do local zoning ordinance..
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