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A simple model of search. Consider an agent who lives two periods. He is unemployed at the beginning of the first period and has a wage offer of w. If he accepts the wage offer w, he will work forever at that wage. If he rejects the offer, he receives an unemployment benefit of 4 dollars this period and he gets to draw a new offer next period. There are only two possible offers with equal probability next period: one wage offer of 8 dollars, and another offer of 24 dollars. The worker’s objective is to maximize the sum of expected discounted earnings. The discount factor β is 0.5. (a) How much would the agent value today a dollar tomorrow? (Hint: use the concept of discount factor).
Prove utilizing a graph, that a diagonal line through the original would intersect each indifference curve once.
Using the specific factors model elucidate why you might expect to see certain capital owners and labor groups arguing against expanding trade in a capital abundant country.
The Dallas Electronics Company is considering replacing an old, 1,000-pound-capacity industrial forklift truck. The truck has been used primarily to move goods from production machines into storage. Calculate the after-tax present value of owning the..
What is the equilibrium output and price level? If aggregate demand shifts right, what is equilibrium output? If aggregate demand shifts left, what is equilibrium output?
A fairer distribution of rewards may generate a higher average productive effort on the part of the population in that way enhancing efficiency.
The inverse demand curve for widgets is P = 130−2Q. There are two firms, A and B, who produce wid- gets. Each firm has a constant marginal and average cost of producing the good that equals 10. What is the Cournot-Nash equilibrium? You need to solve ..
Illustrate what are some more common restrictions on the activities of multinational corporations in host countries
A firm in a competitive input market can
illustrates the likely effect on the marketplace for eggs. Indicate in each case the impact on equilibrium cost also equilibrium quantity.
Define the four basic types of trade barriers. Who gains and who loses from a protective tariff? Explain. Identify the four major tools of monetary policy. Describe how a change in the Fed’s major policy tools leads to [1] expansionary and [2] restri..
If she has to eat only whole servings, what will she have for breakfast, and how many calories will she consume? If she can eat partial servings, how would your answer differ?
The operating instruction issued to the European Central Bank is to use monetary policy to focus entirely on targeting the inflation rate. If it follows those rules what would it’s Taylor rule equation look like? Be specific.
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