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Assume bread is subsidized in a small Caribbean nation with a high percentage of citizens who live in poverty. The subsidy is paid to suppliers of bread through government in amount of 50 pesos per loaf. In the absence of the subsidy, the price of bread would be 100 pesos per loaf. Assuming that the supply of bread is perfectly elastic at the 100 peso price, what is the effect of the subsidy on the market equilibrium price of bread? Draw a graph, and explain the excess burden of the subsidy. Assuming no externalities, why will subsidy result in more than the efficient amount of bread being produced? Create a graph on a spreadsheet program
Elucidate what are the effects of monetary policies on the economy's production and employment.
In the US the long-run inflation rate can be expressed simply as the growth rate.
Explain why competitive markets normally lead profit maximizing firms to make choices about resource use that lead to an "efficient" allocation of resources to the market?
Which nation has the absolute advantage in the production of tanks. Why is it this country? Which country has the comparative advantage in the production of computers.
Utilizing an appropriate diagram, show and explain briefly how a rise in the minimum wage could result in higher employment
Illustrtae what position should the fund manager take to hedge exposure to the market over the next two months.
Suppose Q is the quantity demanded for medical care services. The linear industry demand function takes the form.
Your company is considering expanding overseas. It is particulary interested in developing markets, and narrowed its choice down to two countries, A and B.
Explain why do economists believe that the CPI overstates the rate of inflation
Elucidate what is the effect of an increase in the quantity of money. What is the difference between real variables and nominal variables.
Illustrtae what should the arbitrageur do. Suppose that the cost of storing gold is zero and that gold provides no income.
Suppose that a small town uses a referendum to overcome free ridership problem & determine how its residents might value a new water filtration system for its public water supply.
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