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If the marginal rate of substitution of coffee for Pepsi is 3 and the price of a coffee is €2.50 while the price of a Pepsi is €1 then which is better value for money: another coffee or another Pepsi? Which good has higher marginal utility?
What type of economic flow would be illustrated b the purchase of a Mexican candy-making factory by a US company.
According to the graphical method used in class, figure out how a decrease in government purchases (G) is going to affect the IS curve. Is decrease in government purchases an expansionary fiscal policy or a contractionary fiscal policy? Why?[Hint: Us..
What must saving rate be in initial steady state. What is marginal product of capital in initial steady state. Suppose that public policy rises saving rate so that economy reaches Golden Rule level of capital.
You open your browser and you click on a URL. Assume that the webpage associated with the URL consists of a small HTML file and 2 small images, all stored on the same webserver. Let RTTcs be the RTT from the client host to the webserver containing..
Consider a Stackelberg competition with one leader and multiple followers. All products are homogeneous. Marginal cost for all firms is zero and all products are homogeneous. If the leader produces a quantity of 6 units how much would each of the oth..
A firm has $2.5 million in sales, a Lerner index of 0.67, and a marginal cost of $50, and competes against 800 other firms in its relevant market. What price does this firm charge its customers? By what factor does this firm mark up its price over ma..
If a basic input like oil goes up in price by 20 percent and accounts for 3 percent of total costs in the economy, how much cost-push inflation results?
Two political candidates are vying for town mayor and the key issue is how much to spend on the annual Fourth of July fireworks. Among the 100 voters, 40 want to spend $30,000, 30 want to spend $10,000, and 30 want to spend nothing at all. What is th..
Suppose the economy produces only 2 goods: consumer goods and capital goods (K). Also suppose the economy is operating at full employment. Finally, suppose consumer goods are subject to legal price controls (price ceiling). Use a PPF to show the econ..
Hollow just paid a dividend of $1.68.They expect dividends to grow at 10% for the next 3 years. After year 3, the growth rate will fall to the industry average of 3%.If the required return is 8%, find the current price.
A restaurant has three types of customers. A third of its customers, Type A, are willing to spend $5 on an appetizer but only $2 on a dessert. Another third, Type B, are willing to spend $3.50 on an appetizer and $3.50 on a dessert. Calculate the pro..
A purely competitive wheat farmer can sell any wheat he grows for $10 per bushel. His five acres of land Elucidate how.
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