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Susan quit her job as a teacher, which paid her $36,000 per year in order to start her own catering business. She spent $12,000 of her savings, which had been earning 10% interest per year, on equipment for her business. She also borrowed $12,000 from her bank at 10% interest, which she also spent on equipment. For the past several months she has spent $1,000 per month on ingredients and other variables costs. Also for the past several months she has taken in $3500 in monthly revenue. Should Susan continue operating in the short-run and long-run? Draw graphs to illustrate your point(s).
The American Baker’s Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent..
What are synonyms for increasing returns to scale? How did the one of the authors, Paul Krugman, relate these to international trade?
Describe the impact of an expansionary fiscal policy in an open economy using the ISLM model and the interest-rate parity relationship. Explain what happens to output, the interest rate and the exchange rate, using the appropriate graphs to illustrat..
The world has gone through several different international financial orders over past 100 years. Explain how each one came into being and why the order eventually ran into difficulties and was suspended by another order.
Do you think the benefits of government regulation exceed the costs? In what areas, if any, do you think the costs exceed the benefits? Cite an example of a company's efforts to circumvent government regulations. Is the use of loopholes ethical?
At the moment, the market is completely ignoring things like record US trade deficits and the widening current account deficit. It is also largely ignoring the possibility of Federal Reserve rate cuts. In what way is fiscal easing in Japan relevant h..
elucidate how the changes in the monetary policy effectiveness lag and the interest-rate multiplier affects how much and how long monetary policymakiers must change interst rates in response to any given demand shock.
Clarifying resource demand as well as differs from those determinant product demand.
Construct a numerical example to show that the exclusion of municipal bond interest from income taxation is equivalent to a government subsidy of state and local capital spending. Assume you believe that income is a good proxy for ability to pay. Wha..
Suppose the inverse demand function is a Cournot duopoly is given by P = 140 -5 (Q1 + Q2) and their costs are zero. What is the total industry output?
Draw a long-run average total cost curve. What other names does it have? Why? There are three separate regions of it. List and explain each of them. List the reasons for the left side of this curve.
Metro Limo also Urban Limo, operate nine passenger vans. These duopolists cannot compete with price, but they can compete through advertising.
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