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Suppose a city government decides that it wants to increase revenue by raising the price of parking tickets.
What government officials increase the price of parking ticket from $40 to $50; they are surprised that their revenue actually falls. What happened?
Compute the level of GDP per capita in each country measured in local currency. Compute the marker exchange rate between the currencies of two countries.
What is the inflation rate in Home? In Foreign? What is the rate of change in the nominal exchange rate? Which currency is expected to appreciate? At what rate? Explain.
There are many factors might change AD and AS, and equilibrium. Please evaluate the effect of following scenario on the AD curve, AS curve, and accordingly the effect on equilibrium price level and equilibrium GDP/output.
How income may change savings behavior
Using the IS/LM/BP model, demonstrate the effect of each of the following changes. Assume that the economy is a small country with perfect capital mobility and a flexible exchange rate.
Determine the profit-maximizing prices both firms will charge. In addition, calculate the price-cost margin for each firm and indicate which has more pricing power and why.
Suppose that deterioration in the education level of the U.S. population reduces the marginal product of labor.
Evaluate: "The fact that some airplanes collide is evidence there is 'too little air traffic control'." (Be sure to explain what too little might mean.)
Explain why a monopolist will never set a price (and produce the corresponding output) at which the demand is price-inelastic.
What is the business cycle and how is it linked to a secular trend? Describe each of the four phases of the business cycle and indicate how they a linked to the concepts of a "boom", a "recession" and an "expansion".
Consolidated Drugs, Inc. has spent $4 million developing and testing a new anti-aging drug. Management now estimates that it will cost $2 million to produce and market this new product.
Consider a firm that has just built a plant, which cost $20,000. Each worker costs $5.00 per hour. Based on this information, fill in the table below:
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