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1. Two nations have straight line production possibility frontiers, but with different slopes. Using a graph and an accompanying written explanation, explain why complete specialization maximizes the gains from trade between these two countries.
2. On a set of axes, draw a single concave production frontier with two different community indifference curves tangent to the single production frontier, on the assunption that two nations are identical in production but have different tastes. Indicate on your figure the autarky equilbrium relative commodtity price in each nation and show the process of specialization in production and mutually beneficial trade.
What are the benefits and challenges when implementing Industrial policy? How does comparative advantage relate the implementation of industrial policy?
how the change in money supply affects investment demand and as a consequence, aggregate demand. What role dose the spending multiplier play in this process?
If taxes were cut by $1.5 trillion and the MPC was 0.85, by how much would total spending
An executive-search firm has shown that job search time and higher salaries are directly correlated. They have shown that for every $10,000 of additional compensation the search will take an additional month. Is a month spent in searching rather than..
Canon will receive payment from its dealers on August 28th, 2012. Assuming which Canon needs to cover its expenses in Japan
How does income and wealth distribution impact Consumption? What happens to GDP when income/wealth distribution becomes more concentrated? What ideas do you have for making income/wealth distribution more equal?
Why are people who possess specific human capital less likely to change jobs, other things being equal, than those who possess general human capital? Does this imply that people who possess large amounts of specific human capital will never migrate..
Assuming other countries do not change their own trade policies, what would be the impact on the value of the dollar relative to other currencies? What would be the effect on the jobs in U.S. industries?
. Abstracting out this income effect would leave the quantity of X unchanged. On the other hand, beyond the switch point, only Y is consumed and no changes in Px will have any income or substitution effect.
Suppose E-Mobile purchases every gas company in the world and set their prices. Then it would have a control of the gas market with no other competition. Thus E-Mobile becomes a monopolist in providing gas. The market demand curve faced by E-Mobile i..
Consumer A values good 1 at $4,500 and good 2 at $1,500. Consumer B values good 1 at $5,000 and good 2 at $1,000. Costs are zero. Suppose the monopolist only sold the goods separately. What prices will the monopolist charge for good 1 to maximize rev..
In the country of Wiknam, the velocity of money is constant. Real GDP grows by 5 Percent per year, the money stock grows by 14 percent per year, and the nominal interest rate is 11 percent. What is the real interest rate? In Wiknam if Real GDP growth..
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