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Assume two firms, A and B, serve a market with demand D(p) = 100 - p. Assume that (i) they have identical cost functions, c(Q) = 5Q, (ii) they compete for market share via quantity competition, and (iii) firm A supplies to the market before B does. Describe this as a game between the two firms (i.e. Specify the players, the strategies, and the payoffs they receive as a function of their respected strategies).
At what price will she buy four visits? Eight visits? What is the elasticity of between a price of $5 and $6 per visit? Between a price of $29 and $31?
What is the present value of $300 to be paid in two years if the interest rate is 12%? What happens to reserves at Third National Bank if one person withdraws $2,000 of cash and another person deposits $750 of cash?
Explain how the central bank in a modern economy operates; in particular, how it tries to control the monetary base (H), and thus the quantity of money (M) via open-market operations.
Maggie's utility function is and her income is $5000. Then her MRS at generic bundle (x1, x2) is 50-0.25x1. Commodity 2 is a composite good, and hence its price is unity.
Assume that the exchange rate between the Canadian dollar and the Euro is 2 Euros per Canadian dollar.
What government officials increase the price of parking ticket from $40 to $50; they are surprised that their revenue actually falls. What happened?
Draw a diagram describing autarky and a pattern of comparative advantage for your example.
Explain how each of the following scenarios would cause the aggregate demand, short-run aggregate supply, and/or long-run aggregate supply.
Find out what quantity of the book Warm fuzzy should print, and what price it should charge in order to maximize profit.
Suppose that the governmental authorities wished to decrease use of a pesticide that is leaching into groundwater supplies in a watershed by 60% from current use levels.
Assume an economy in which the reserve ratio is 15 percent, people hold 10 percent of their deposits in the form of cash, and there are no other leakages.
Assume an economy's real GDP is $30,000 in year 1 and $31,200 in year 2. What is the growth rate of its real GDP?
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