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Use the following information to answer the questions below:
Manufacturing : Sales = 100 Payment to labor = 60 Payment to capital = 40
Agriculture : Sales = 100 Payment to labor = 50 Payment to capital = 50
Holding the price of manufacturing constant, suppose the increase in the price ofagriculture is 10% and the increase in the wage is 5%.
a. Determine the impact of the increase in the price of agriculture on the rental onland and the rental on capital.
b. Explain what happens to the real rental on land and the real rental on capital.
Assume the government purposely incurs a budget deficit that is financed by borrowing. As a result, interest rates rise and the amount of consumption spending declines.
If the demand for used cars decreases after the price of a new car fallls, used cars and new cars are
The deadweight loss from a tax is:
Explain how the six external forces could combine/integrate together to have more complex effects on changes in the workplace. For example, technological changes could accelerate reorganization of work. Give some real examples to illustrate the inter..
Calculating savings using the goods market equilibrium. Assume a closed economy (NX=0). Suppose net taxes are $100 billion. Government spending is $125 billion. Investment is $50 billion and consumption is $100 billion. Calculate public savings, priv..
Explain how higher saving leads to a higher standard of living. What might deter a policymaker trying to raise the rate of saving? What is government budget deficit? How does it affect interest rate, investment and economic growth? What is the future..
Use the Aggregate Supply - Aggregate Demand model to determine which of the following will likely lead to inflation. Following a negative AS shock to the economy which of the following statements is most true?
In which of the following situations is the Coase theorem likely to apply? Explain.
Suppose the government of Washington is considering the addition of a new tax on firms. You have been called in to provide expert analysis on how such a tax would affect employment of labor. Compare the plans in terms of their scale and substitution ..
Sally owns a ceiling fan company. Last year, she sold 1300 ceiling fans at $60 each, and each fan costs her $30. Before going into the ceiling fan business, she worked as a fan-dancer at $38,000 a year.
q1. firms with costs c q2 36 face demand p 24 - nq and behave under the rules of monopolistic competition. compute
Explain why a person starting up a small business probably stands a better chance of raising money by applying for a bank loan than by issuing bonds. Banks now control only about half as much of the total financial intermediary assets as they did abo..
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