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The state-appointed receiver for a city said his city’s declaration of bankruptcy had proved invaluable in helping it cut costs. Before the city declared bankruptcy, he said, he had found it impossible to obtain meaningful concessions out of the city’s unions and retirees who were being asked to give up roughly half of the pensions they had earned as the city ran out of cash. Why does bankruptcy give the city bargaining power against its unions?
All other things being equal, by how much will nominal GDP expand if the central bank increases the money supply by $100 billion, and the velocity of money is 3? Suppose now that economists expect the velocity of money to increase by 50% as a result ..
A firm with fixed costs always has losses for low levels of output. A firm with fixed costs must incur economic losses if it chooses not to produce output. A firm with fixed costs can’t maximize profit in the short run.
q1. a good example of an oligopoly market structure is the airline industry. there are not many airlines in the
Suppose that the wage is $20 per hour in a two-sector (manufacturing and agriculture) specific-factors model. Currently, the prices of manufactured and agricultural outputs are $5 and $1, respectively;
Recall the Application. The British Experience with water privatization showed that:
What features of the product cycle theory are at variance with the assumptions of the Heckscher-Ohlin model? Explain.
Revenue-sharing in professional sports. Assume that there are two grades of professional football players. There are a limited number of “stars,” whom the fans most want to watch, and an unlimited number of “non stars.” There are too few stars to ful..
Explain is a high degree of market concentration a boon or threat to consumers. What is the strongest argument on either side.
The market wage rates for left-and right-handed workers are $10 and $15 per worker, respectively. The value of the marginal product of labor is 20 – 0.5L, where L is the total number of workers (it doesn’t matter if they’re left or right-handed). Wha..
In the foreign exchange market, if the interest rate on foreign deposits increases, holding everything else constant,
1. One IKEA executive says that the current global economic situation has "pushed innovation" at the company. In fact, he say, "This is a great time to be more innovative." Explain what he means.
The table below shows the cost of a fixed basket of goods that a typical urban consumer would buy in the economy of Kindleberger, where the base period for the consumer price index (CPI) is the year 2000.
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