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Suppose that two goods are perfect complements. If the price of one good changes, what part of the change in demand is due to the (Slutsky) substitution effect and what part is due to the (Slutsky) income effect? Explain.
Suppose X - M = net exports; T - G = government sector balance; and S - I = private sector balance. What relationship exists among these variables?
What question for appeal did the High School consider?
TT Drinks Company was established a hundred years ago and currently employs over 300 people. The company produces and sells a range of black, green and flavoured teas and fruit infusions. TT's last Director of Marketing was away from work with illnes..
In your opinion, are the resources you devote to your education a form of consumption or a form of investment.
Do you think governments should step in and help an economy move to potential or are "markets" capable of fixing themselves? Carefully consider the impact of falling prices.
How do you choose between log-linear model and log-log model? How about linear log-linear? And how about linear-log and log-log? Why? How do you interpret coefficients of a A) log-linear B) log-log and C) linear-log model?
Economists have devoted a lot of effort to estimating the natural rate of unemployment in particular countries at particular times. Is this a useless academic exercise, or are there good reasons to want to know this number? Explain.
Why might a company choose to produce in one low-cost country rather than another? Now consider what new challenges come from producing in foreign locations. For your new global product/service: How should wage rates be determined?
A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $4,500. The marginal cost of producing the 101st unit of output is $300. Illustrate the total cost of producing 101 uni..
A 40-acre Christmas tree plantation produces $3,500 of net revenue per acre every 9 years. If the interest rate is 8%, what is the maximum amount money you should be willing to pay to acquire the plantation when the first cash flow is 9 years away?
International businesses frequently face sourcing decisions and decisions about whether they should make or buy the component parts that go into their final products. Should the firm vertically integrate into the manufacturing of its own component pa..
In production theory, what distinguishes the short run from the long run? Can these periods be defined in terms of specific lengths of time? Why?
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