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Given the following demand curve
ln(Qt) = b0 + b1ln(Pt) + b2ln(Yt) + ut
where Qt and Pt are the quantity (number) and price of haircuts obtained in Cambridge in year t and Yt is mean income in Cambridge in year t.
Express the price elasticity of demand in terms of the coefficients in (1).
Linus sells hot dogs outside the Dakota Dome during tailgating. He needs exactly one hot dog and one bun to create a hot dog he can sell. Assume no condiments.
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Spielberg takes $100 out of his piggy bank and deposits it in his Hollywood Bank checking account. By how much does the total amount of deposits in the banking system increase (i) if this $100 stays in the banking system as reserves, and (ii) if bank..
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