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Use a simple circular flow diagram (closed, private model) to explain how GDP may be measured by Income (showing the factors and their corresponding incomes in the factor markets) as well as Expenditures, showing consumption as well as Investment expenditures. Explain how leakage (savings) must equal injection (investments) to maintain the balance in the circular flow, and how expenditures being less than income causes the circular flow to contract (Paradox of Thrift)
What is the present value of receiving $200 one year from now when the prevailing rate of interest is 8 percent? What is the present value of $200 to be paid to you at the end of two years, if the market interest rate is 5 percent?
Suppose that a small nation produces mushrooms for domestic consumption also possible export.
Newsprint is produced in a perfectly competitive market. Each identical firm has a total variable cost VC= 40q + .5q^2 with an associated marginal cost curve MC = 40 + Q. A firms fixed cost is equal to 50. Calculate the price below which the firm wil..
Analyze these indicators and prepare a 3-4 page report elucidate the expected short-term impacts on firms in any one of the following five industries in terms of product sales.
Okun's Law: Suppose the economy has a natural rate of unemployment of 6%. Suppose short-run output over the next 4 years is +1%, 0%, -1%, and -2%, According to Okun's law, what unemployment rates would we expect to see in this economy?
Suppose a certain state increases the license fees that physicians must pay from $500 to $2000 per year. Trace out the impact of the increase in fees an average cost, average variable cost, fixed cost, and marginal cost for physicians operating in th..
q1. what effective value is facing japan airlines for the purchase of a boeing 747 if boeings aircraft values in
q1. suppose a competitive firm that is profit maximizing pays a wage of 750 per week and the price of its output is 15.
Suppose that a single firm monopolizes the market for coffee imports from Colombia into the United States. Supposed the firm is called Juan Perez. Juan Perez has production costs characterized by constant returns to scale such that AC=MC=40. Calculat..
Explain how can changes in macro environment affect industries through the microeconomics factors of demand, production, cost and profitability.
Crepe Creations is considering franchising its unique brand of crepes to stall-holders on Hermoza Beach, which is five miles long. How many franchises should now be awarded if we make the standard assumption that the effort costs of the stall holders..
Explain the marginal productivity equalization test and discuss the role of the total factor productivity (the parameter A in the production function) to solve the seeming puzzle presented in the data. How big are these productivity cross-country ..
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