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The city council of a small college town decides to regulate rents in order to reduce student living expenses. Suppose the annual market clearing rent for a two bedroom apartment has been $700 per month and that rents were expected to increase to $900 per month within a year. The city council limits rents to their current level.
A) Draw a supply and demand graph to show what will happen in the market for student housing after the control is enacted.
In monopolistic competition, firms are said to have zero long-run economic profit. This makes me wonder whether profits of intermediate goods producers in New Keynesian model ever be zero.
Explain why does it matter which particular mix of price and quantity is selected.
Illustrate the effect of captial formation by comparing the production possibilty curves, at the present time and ten years in the future, for two economies.
You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -5, while group 2’s is -3. Your marginal cost of producing the product is $40. Determine your optim..
Explain what it would mean for you to move upward and to the left along your personal PPF. What kinds of adjustments would you have to make in your life to make such a movement along the frontier?
Consider a Stackelberg competition with one leader and multiple followers. All products are homogeneous. Marginal cost for all firms is zero and all products are homogeneous. If the leader produces a quantity of 6 units how much would each of the oth..
Explain how much does the total amount of deposits in the banking system increase? By how much does the money supply increase.
Assume which the market for avocados is perfectly competitive. The typical agribusiness firm is earning positive economic profit in the short-run equilibrium.
If a consumer goes to buy an entertainment center at Best Buy for $2,000 and the mpc is .80, what will be the effect on the economy? What if the mpc really turns out to be .75? Why is there such a difference?
Three estimators at Tech Engineering have come up with the estimates of cash flows as shown in the table below for a project with a life of 10 years. Compute the expected NPW at 20%.
You are manager of BlackSpot Computers, which competed directly with Condensed Computers to sell high-powered computers to businesses. Explain how will impact BlackSpot bottom line.
Do these countries experience diminishing returns to physical capital per workee. And technology are held fixed in each country, can you recommend a policy to generate a doubling of real GDP per capita in Albernia. Amount of human capital per work..
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