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In the final round of a TV game show, contestants have a chance to increase their current winnings of $1 million to $2 million. If they are wrong, their prize is decreased to $500,000. A contestant thinks his guess will be right 50% of the time. Should he play? What is the lowest probability of a correct guess that would make playing profitable?
Will these monopolies typically earn economic profits. Why do not other airlines enter these monopoly routes.
When a leading developing country defaults on its loan to foreigners, discuss (with the aid of loanable funds market diagram) why interest rates will rise on bonds issued by many other developing countries.
Use two graphs to analyze the effects of the following shocks on the equilibrium quantity of savings, investment, the interest rate, and the current account in a world with two large countries. Assume that both countries begin with a balanced current..
Suppose two countries, A and B, with the same production function Y = K? L 1?? . The value of ? is 0.30, the growth rate of population is 2% and the depreciation rate is 5%. Compare both economies to the Golden Rule.
Demand-pull inflation occurs when:
From a long-run production function (e.g., Q = 4K + 2L or Q = K0.5L0.5), which of the following may be determined? the quantity of output resulting from all combinations of inputs (e.g., capital and labor). the combination of inputs (e.g., capital a..
From a Producer’s point of view, describe the different kinds of Inflation, explaining how each can affect an overall economy in the short term and also the long term and specifically how you (the producer) would be affected in each case.
Which of the following actions on the part of the Fed will result in a decrease in the money supply?
Calculate point price elasticities of demand for each customer product at activity levels identified in part A.
To increase tax revenue, the U.S. government in 1932 imposed a 2-cent tax on checks written on bank account deposits. How do you think the check tax affected the currency–deposit ratio? Explain. Use the model of the money supply under fractional-rese..
You are the general manager of the Red Dog mine, which is the sole operator in Alaska selling copper. You have a maximum of S =1,000 tons available to sell this year and next year, and the demand for copper will be constant at p = 1000-q each year, D..
Suppose that during the past year, the price of a laptop computer fell from $2,650 to $2,430. During the same time period, consumer sales increased from 495,000 to 664,000 laptops. Calculate the elasticity of demand between these two price–quantity c..
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