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A few years ago, a construction manager earning $70,000/ year working for a regional home builder decided to open his own home building company. He took $100,000 out of one of his investment accounts that had been earning around 6% a year and used that money to start up the business. He worked hard for the first year, hiring one employee (his only salary cost for the business was $40,000 paid to his employee), and generated total sales of $1,000,000. Total material and subcontracted labor costs for the year were $900,000. Calculate accounting profit. What are the opportunity costs for the manager of being in this business relative to returning to his old job? what is the economic profit of the business?
Calculate the constant debt-GDP ratio that the country can achieve if the country runs a primary budget deficit of 3%. Is this debt-GDP ratio stable.
What are price indexes designed to measure. Outline how they are construed. When GDP and other and other income figures are compared across time periods.
describe the current account balance, the capital account balance, and the official settlements account balance.
Assume a one-time decrease in population, possibly caused by an onset of disease or a sudden out-migration.
Illustrate if there were only one supplier of diamonds, elucidate what would be the price and quantity
On the same day, the San Francisco Chronicle had an article with the headline "Sharp Drop in Bay Area Home Sales"
How large is the bias in the CPI due to not immediately incorporating new goods.
Distinguish between the two types but knows the probabilities of each type. What would be the result in this market for loans.
The average price of red stubble is about $8 per kilo also the fisher people's revenues for catching red stubble immediately cover their costs.
Discuss salary determination in a labor market in which workers are unorganized and many firms actively compete for the services of labor.
The social security system levies a tax on workers and pays benefits to the elderly. Suppose that Congress increases both the tax and benefit.
what happens to gross debt as a percentage of GDP. Elucidate what happens to the level of debt held by the public as a percentage of GDP.
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