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1.Two individuals are having a picnic. Jane brings eight litres of soft drinks and two sandwiches. Bob, on the other hand, has two litres of soft drinks and four sandwiches. With these endowments, Jane's marginal rate of substitution (MRS) of soft drinks for sandwiches is 3, and Bob's MRS is equal to 1.Draw an Edgeworth box diagram to show whether this allocation of resources is efficient. If it is, explain why. If it is not, then explain and show what exchanges will make both parties better off.2.Suppose there are two goods, video cassettes and record albums, produced by two firms (firm A and firm B). Moreover, suppose the marginal rate of product transformation (RPT) of record albums for video cassettes in firm B is 2. That is, firm B can always trade 2 video cassettes for 1 record album in production . On the other hand, the RPT in firm A is 1. Assume that each firm's RPT is constant over all possible output combinations.If firm A produces 100 record albums and 100 video cassettes, how might firm A be made better off by shifting its output mix? Explain your reasonings clearly.3.When lecturing to 200 students in a room of 250, there is ample opportunity to add more students at a marginal cost of zero. Since lecturing to one is no different than lecturing to 250, the product (i.e., education) has the element of a public good. If that is the case, why do universities charge tuition that is far above the marginal cost of production?Explain, relating part of your response to whether or not the good in question (i.e., education) has all the characteristics of a public good.4.Suppose a computer programmer lobbies against copyrighting software. He argues that everyone should benefit from innovative programs written for personal computers, and that exposure to a wide variety of computer programs will inspire young programmers to create even more innovative software programs. Considering the marginal social benefits possibly gained by his proposal, do you agree with the programmer's position?Describe in the context of public good analysis.
Based on your reading, which market structure is more applicable for the market for building commercial aircrafts, when there are two major manufacturers of the commercial airplanes and little possibility of entry by new firms:
Environmentalists discuss that the trade liberalization harms the environment. The decisions of World Trade Organization in particular have been the subject of much criticism.
Determine the advantages or disadvantages of buying imports versus buying domestic products in relation to fashion industry.
Suppose you are a fixed income fund manager based in euroland. Expected return of the EUR bond market is 4.4 percent and risk 5 percent, expected hedged return of the United Kingdom bond market 5.5% and risk 5.5 percent.
Suppose that a nation faces a balance of payments deficit with high unemployment. Determine what exchange-rate adjustment can be made to solve these problems?
Presidents, senators and members of congress came from a different backgrounds but all must decide upon a great many issues that involve macroeconomics.
What role did Swiss government and politics play in 2001 liquidity crisis and grounding of Swiss air and did the government and politicians act unethically together with the banks.
In exchange for a $20,000 payment today, a well known company will allow you to choose one of the alternatives shown in given table. Your opportunity cost is 11 percent.
In one day, Canada can manufacture either 200 tonnes of wheat or ninety tonnes of copper ingots. In one day, Chile can manufacture either 120 tonnes of wheat or 175 tonnes of copper ingots.
If standard microeconomic analysis could be applied to labour market, then there would be no such thing as unemployment.
Assume that both the stock market and housing prices fall in the United State 1st, describe the channels through which these shocks affect aggregate demand for goods and services.
The customer price index is a fixed weight index. It compares the price of fixed bundle of goods in 1-year with the value of the same bundle of goods in some base year.
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