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When entrepreneurs are investing their own money, how do they decide which projects they should undertake? When political decision-makers allocate the funds of others (taxpayers), how do they decide which projects to support? Explain.
If the demand for a commodity is elastic, an increase in the price of the commodity. Assume the cross price elasticity of demand for products A and B is positive.
Nominal interest rates are quoted at a variety of maturities, corresponding to different lengths of loans. For example, in late 2004 the U.S. government could take out ten year loans at an annual interest rate of a bit over 4 percent, whereas the ann..
Explain how to measure the price elasticity of demand and supply and the cross-elasticity income elasticity of demand? Explain the elasticity of supply for gasoline?
Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2011, the money supply was $320, the price of a pie was $8.00, and ..
Which is true for a purely competitive firm in short run equilibrium?
The construction cost of a permanent park is $600,000. Annual maintenance and operation costs are $120,000 per year. At an interest rate of 10% per year, the capitalized cost of the park is nearest to:
You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semi-annual interest payment. The bond rate is 6.6% per year payable semi-annually. You plan to hold the bo..
The Fed wants to increase the money supply (which is currently 4,000) by 200. The money multiplier is 3. For each 1 percentage point the discount rate falls, banks borrow an additional 20. Explain how the Fed can achieve its goals using the following..
If a firm can sell its product for more than its fixed costs, but not for more than its totals costs:
assume equilibrium price in a perfectly competitive market is $100 and within this market, a typical firms total cost curve is summarised. Find expected profit maximizing output.
An increase in government spending initially and primarily shifts which curve in what direction
george has been selling 5000 t-shirts per month for 8.50. when he increased the price to 9.50 he sold only 4000
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