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Assume an economy only produces a single consumption well. Consider a permanent upward shift of a production function. Graphically illustrate the effects on each of the following:
1. The real wage rate and the equilibrium quantity of labour.
2. The equilibrium quantity of goods and rate of interest.
Mention the four assumptions for the Monopolistic competition model.
Write a 400- to 700-word memo to the economic adviser. Describe the change in tax revenues for the government in the new equilibrium, in both the short and longer terms.
Draw a diagram describing autarky and a pattern of comparative advantage for your example.
Find the equation of the new demand curve for Chevrolets. What is the relationship between D C and D' C ? What explains this relationship?
Calculate total factor productivity growth (our measure of technological progress) for each country using the growth accounting framework discussed in class.
Give at least three explanations of why economic reasoning would argue that this is to be expected.
What distinguishes money from other assets in the economy? What are demand deposits, and why should they be included in the stock of money?
Given table of data comprising real GDP and its components over a number of years, compute compound annual percentage changes in real GDP (economic growth) and compute the shares in real GDP of consumption.
Using the Lerner index, find the price elasticity of demand for Botox and interpret what this value means to total revenue if the price of Botox were increased one percentage point.
What happens to the equilibrium price and quantity in each market? Which product experiences a larger change in quantity? Which product experiences a larger change in price?
Application of Nash Equilibrium and Game Theory with examples
Let the market demand for rye bread be given by Q = 500 + I - 250P rye + 400P wheat , where Q is monthly demand in number of loaves, I is average monthly income in dollars
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