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Using the broken window fallacy as described in “In The News” (p. 14 of Principles of Microeconomics), explain why some journalists, policy makers, and others proclaim that natural disasters are good for the economy in terms of eliminating old infrastructure and helping to create jobs. Do you agree or disagree? Provide specific examples to support your answers.
When the crisis hit the world financial system, XYZ felt the shock inevitably. In any case, XYZ's government couldn't afford to bail out its bank that had gotten so much bigger than its economy. Explain what happened to this country when the world fi..
Suppose you are the manager of a home-building company and the government is considering eliminating the deduct-ability of mortgage payments interest.
What are the defining characteristics of the luxury goods industry? What is the industry like? (Describe market size and growth rate, scope of rivalry, consumer characteristics, degree of product differentiation, etc.) How is the market for luxury ha..
You will apply important microeconomics concepts toward the competitive strategies of an organization that operates in an industry of your choice. You will evaluate the differences between market structures and identify a group of competitive stra..
The Red Cross and WIC (Women, Infants, and Children program) both provide emergency food packages and first-aid kits to New York City home-less shelters. Table 2P-1 shows their weekly production possibilities in providing emergency goods to NYC homel..
We found GDP in 2010 was roughly $15,000 billion. You learned in Chapter 1 that GDP fell by approximately 3 percentage points in 2009. Use the simplest model of fiscal policy from Chapter 3 to answer the following. How many billion dollars did GDP fa..
Describe the coefficient of correlation between the two variables. Interpret the value. Is it reasonable to conclude that there is a positive relationship between revenue and occupied rooms.
As part of his plan to reduce the budget deficit, President Clinton proposed raising the excise tax on gasoline by 50 cents per gallon. While passage of this proposal was blocked by Congress, what would have happened to the sales of gasoline if the p..
Describe the characteristics of optimal contracts in principal-agent problems when the agent (manager) is risk neutral.
Explain the significance of realignment in American politics and make a prediction as to which groups may switch parties in the near (0-16 years) future
Suppose the production function for pasta is Q = 4kl ; What is the long-run optimal input combination when Q = 16 , r = 4 , and w = 36 and what is the long-run total cost function when r = 4 and w = 36
What do real interest rates account for that nominal interest rates do not? The level of real GDP is a good measure of economic prosperity, and the growth of real GDP is a good measure of __________. A higher interest rate makes more attractive. Ther..
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