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Explain intuitively why indifference curves as defined, cannot cross. Further, why would an allocation where an indifference curve intersects the budget line be considered inefficient if the indifference curve is not tangent to the budget line at that point?
Why does the slope of the aggregate supply curve change from the short run to the long run? What are the differences between classical theory and what Keynes believed?
The profits of the four major networks (CBS, NBC, ABC and Fox) depend significantly on the ratings of its prime time shows. The higher the ratings, the higher the price the network can charge for advertising and the higher the profits of the network.
What does the production possibilities curve represent? discuss the implications. what are the factors of productions? What is the difference between the current account and the capital account, what is included in each calculation? are these account..
In the economy of Mungo, discussed in your workbook, there is a third person called Ike. Ike has a red income of 40 and a blue income of 10. (Recall that blue prices are 1 bcu [blue currency unit] per unit of ambrosia and 1 bcu per unit of bubblegum...
Compute the price elasticity of demand when price changes from $100 to $80 per pair using the average formular.
American firms commonly invest in securities overseas. Analyze the situation in which firms anticipate a currently weak dollar to strengthen in the near term. How would you expect this assessment to change American firms’ level of overseas investment..
The Economy cannot be considered fully employed unless the measured unemployment rate is below 1%. Agree or disagree and explain your answer in a paragraph.
Interest rate parity suggests that the difference in interest rates between two countries affects the change in exchange rates over time. While not a perfect predictor, it has been shown to be an unbiased predictor and has more explanatory power than..
If the government establishes a quantity subsidy on the consumption of a good, it means that the consumer has to pay for each unity of the good its price minus the subsidy. That is, the price of the good becomes, in the consumer’s point of view, p..
A land development company is considering the purchase of earth-moving equipment. The equipment will have a first cost of $190,000 and a salvage value of $70000 when the company sells it in 10 years. how many days per year must the company need the e..
When the price of an inferior good declines, does the substitution effect tend to increase or decrease the quantity purchased of that good? Explain and show graphically.
What is the equal payment series for 10 years that is equivalent to a payment series starting with $30,000 at the end of the first year and decreasing by $3,000 each year over 10 years? interest is 8% compounded annually.
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