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Upscale hotels in the United States recently cut their prices by 20 percent in an effort to bolster dwindling occupancy rates among business travelers. A survey performed by a major research organization indicated that businesses are wary of current economic conditions and are now resorting to electronic media, such as the Internet and the telephone, to transact business. Assume a company's budget permits it to spend $5,000 per month on either business travel or electronic media to transact business. Graphically illustrate how a 20 percent decline in the price of business travel would impact this company's budget set if the price of business travel was initially $1,000 per trip and the price of electronic media was $500 per hour. Suppose that, after the price of business travels drops, the company issues a report indicating that its marginal rate of substitution between electronic media and business travel marginal rate of substitution between electronic media and business travel is - 1. Is the company allocating resources efficiently? Explain.
Explain how that the balance sheet balances if these are the only assets and liabilities.
Profits associated with polluting for Friedman Inc. are π = 40Q - 2Q2, where Q = pollution emitted (in tons), and profits are measured in dollars.
Suppose that the demand for healthcare services is perfectly inelastic while the supply curve is upward sloping. Analyze the impact.
On the graph below, use the blue points (circle symbol) to plot the federal debt as a percentage of nominal GDP for every of the five years elucidate how.
What are the factors that will allow them to increase their added value in this type of competitive environment.
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Assume the U.S. government implements a policy that achieves the savings rate needed to achieve the golden rule level of capital.
Explain how large an income tax cut is needed Alternatively Explain how much more government spending would achieve the target.
Demonstrate the short-run effect of this tax cut using the IS-LM model also the AD-SRAS-LRAS model. Illustrate what will take place to o/p also the interest rate.
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