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1. Does the duration of unemployment matter? Explain your answer.
2. What are three issues regarding the accuracy of the CPI? Give an example of each issue.
3. If the prices of houses go up by 5% and the prices of concert tickets rise by 10%, which will have the larger impact on the CPI? Why?
4. What are some problems caused by inflation, other than a decrease in purchasing power? Briefly explain each one.
When a good is limited, some means must be found to ration the scarce commodity. Some examples of rationing devices are auctions, ration coupons, and first-come, first-served systems. What are the strengths and weaknesses of each?
Discuss the statistical significance of the parameter estimates a, b,c, and d using the p-values. Are the signs of b,c, and consistent with the theory of demand. Wilpen plans to charge a wholesale price of $1.65 per can. The average price of a ten..
calculate the exact elasticity of demand in the following examples: Then tell if, in each case, demand is elastic, inelastic, or unitary elastic. (a) When the price of a deluxe car wash rises from $10.00 to $11.00, the number of daily customers fa..
Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50.
Lenders perceive that you are risky, so you must pay 12 percent annual interest to borrow from one of them. You only receive 6 percent on funds you have deposited in the bank. Do the opportunity costs of borrowing and using your own funds differ.
There is a single difference: we've changed the exponent on At in the production function of the output good so that there is now a diminishing marginal product to ideas in that sector. 1. Provide an economic interpretation for each equation.
Samuel Huntington asserts that "power-seeking" is the dominant force in international affairs. Does this mean that liberalization and globalization are about power rather than extending free trade at home to nations abroad? Explain why power and P..
If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of potatoes per year. If she devotes all her resources to raising chickens, she can raise 50 chickens per year.
Given this, why might stock prices be a good predictor of recessions?
Assuming you continue to earn $30,000 starting in period t 1, graph the value of your permanent income in each period, using equation (P1).
Again consider the Coke and Pepsi example discussed in the chapter.
Each firm's decision will affect its own profits, as well as profits of its competitor. The following payoff matrix shows the possible outcomes for this game between Coke and Pepsi. Here Coke is the row player and Pepsi the column player.
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