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Question1: Determine absolute advantage and comparative advantage and explain why will resources specialize according to their comparative advantages? Why will this specialization increase production? Why will specialization increase trade?Question2: Who is counted as employed or unemployed in the unemployment statistics? What groups in society are not represented at all in the unemployment statistics (i.e., who is not a part of the civilian labor force)? How is the unemployment rate measured?Question3: Explain the limitations of using Gross Domestic Product (GDP) as a measure of economic activity.
Physical capital, Natural resources, Human Capital and Technical Knowledge, should it be Government policy to subsidize the production or acquisition of all or these?
Demand for refrigerators is often explained as cyclical and very sensitive to refrigerator prices & interest rates. Given these characteristics, explain the effect of each of the following in terms of;
Assume a country decides it will either dollarize or create a currency board. Of these two options, why might dollarization be a better choice.
Assume a country that basically consumes 100 pairs of shoes per hour, all of which are imported. The price of shoes is $40 per pair before a ban on importing them is imposed.
Ms. Fogg is planning a trip where she plans to spend $10,000-What is the maximum amount that Ms. Fogg is willing to pay to insure the $1,000?
Imagine that the firm must choose one of three quality levels: z = 1; z=2; and z = 3. Which quality choice will maximize the firm's profit?
Assume you decide to open a copy store. You rent store space, and you take out a loan at a local bank and use the money to buy 10 copiers.
Proide that the economy grows is allowed to grow through the banking system and the creation of money through lending.
Keynes describws that the level of output and employment in the economy was determined by aggregate demand or effective demand.
The Government budget has been making at a deficit of approximately $60 billion for the last year, up from $50 billion the previous year.
Explain why do people who work at investment banks earn so much. What is the justification for capital requirements imposed by bank regulators.
Elucidate who decides whether these particular products should continue to be produced and offered for sale. How do these decisions differ between capitalist and socialist systems.
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