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A variation on the Renter model: Consider the following variation: There is only a single difference: we've changed tile exponent on production of the output good so that there is now n diminishing product to ideas in that sector. Provide an economic interpreted ion for each equation. What is the growth rate of knowledge in this economy? What is the growth rate of output per person in this economy? Solve for the level of output per person at each point in time.
What are sub-prime mortgages? What are mortgage backed securities? How did they cause the financial crisis? Did the Dodd-Frank Wall Street Reform Act try to change regulations to prevent future financial crisis? What if banks invest in risky derivati..
Draw two markets, one for skilled workers and one for unskilled workers. If the number of unskilled workers is rising due to immigration (both legal and illegal) and the demand for skilled workers is rising, what occurs in the two markets?
When Lisa was 16 years old, she bought a pedigree dog on credit for $1,200. While Lisa was a minor she made numerous payments on the contract price for the dog. The dog has now contracted a serious illness. Can Lisa avoid the contract and why? If so,..
What is the main reason for network externalities to arise? What are the economic consequences of such externalities? Several years ago there were several word-processing software, for example WordPerfect and many others. Now Microsoft Word basically..
An increase in the fixed cost of working will ________ labor force participation and ________ hours of work (of those working before and after the increase in the fixed cost of working) A worker is indifferent between job one lasting 4 hours a day, j..
Why does a newspaper dispenser open to a stack of newspapers and essentially “trusts” a consumer to take just one copy whereas a soft drink vending machine does not “trust” consumers and dispenses one can for each purchase? Describe how marginal util..
An environmentally friendly green home (99% air tight) costs about 8% more to construct than a conventional home. Most green homes can save 15% per year on energy expenses to heat and cool the dwelling. For a $250,000 conventional home, how much woul..
Suppose that demand for a product is given by Q=1000-P. Supply of the product is given by Q=2P. There is a positive consumption externality from this product, in the amount of $5 per unit. What quantity of the good is consumed under the private marke..
the monopoly will experience a loss the monopoly will earn a profit the monopoly will earn zero profit consumers will be worse off than they would be if the firm's profit maximization activities were unregulated
The Federal Reserve has not formally adopted inflation targeting. The inflation target, stated or implicit, is usually around 2%. The Federal Reserve chairman credited with ending the Great Inflation is
Assume that a firm has the following short-run production function: q = 10L^0.5 and that the market wage rate is 4. Derive the equations for marginal and average product of labor. What is the equation for the firm’s short-run supply curve?
On a graph, consumer surplus is represented by the area...
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