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Assume an airline flying on the Charlotile - Chicago route has estimated the demand curves for three different types of customers: business (no advance purchase), leisure (7 day advance purchase), and discount (14 day advance purchase) travellers. They are: Business: P = 600-Q and P=400-3Q and MR = 400-6Q. Assume there is only one class of service, hence the marginal cost of providing the service is equal for all customers and is $200. What price will the airline charge to each of the three different segments of customers?
What was the growth rate of nominal GDP between 1999 and 2000? (Note the growth rate is the percentage change from one period to the next).
Assume the airline industry consisted of only 2 firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) = 40q. Suppose the demand curve for industry is given by P = 100 - Q and that each firm expects the other to ..
Suppose that in response to learning that some sick individuals were denied health insurance, the government mandates that insurance companies must offer insurance to everyone at unregulated rates.
Vulnerability Analysis
What kind of shocks could have caused this change to the money demand function? Determine the new interest rate and equilibrium level of output.
Please evaluate the effect of the following scenario on the AD curve, AS curve, and accordingly the effect on equilibrium price level and equilibrium GDP/output.
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.
What was the cross-exchange rate between the Real and the Peso in 2001? Real____/Peso. What was cross-exchage rate between Real and Peso in 2002? Real_____/Peso.
Suppose that all other banks hold only the required amount of reserves. If Nan Bank Inc. decides to reduce its reserves to only the required amount, by how much would the economy's money supply increase?
Assume the government decides to pass a law that requires all businesses to delay all future layoffs, giving at least 3 months notice to any workers they plan to lay off.
For each of the following events, state whether the aggregate demand curve would increase, decrease, or stay the same.
Show how expansionary fiscal and monetary policies work. Under what conditions would these policies work more, or less, effectively?
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