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Assume that the economy is initially in equilibrium at potential GDP. Use an AD-AS graph to show the effect of an increase in government purchases on the price level and the output level in the short run and in the long run. Explain what is happening in your graph.
Assume that you were ready to buy a custom tailored dress (or men’s suit) and you are prepared to pay up to $200 for it. Also assume that the tailor is prepared to sell that item of clothing for as little as $100. When you arrive at the tailor shop, ..
Your firm has a cost function C=6+4Q+Q^2. (The corresponding average cost function is AC=(6/Q)+4+2Q and the corresponding marginal cost function is MC = 4+2Q). What is the optimal ouput if the price of your product is constant at P=20?
A firm's production function is qi = 2Li + 10Ki. Assume both variables can be adjusted, even in the short run (for instance, making an item by hand versus using a machine to do so). What is the firm's cost function. Now suppose the output price is $8..
suppose there are 50 honey producers in the market. What is the equilibrium price of honey? How much profit does an individual producer make in a month?
After you have studied economics in the news on pp. 202-203, answer the following questions. a. what changes in the interest rate and the quantity of M2 occurred between 2007 and 2014. b. why is the outcome feared by bankers optimistic.
The market for all-leather men's shoes is served by both domestic (U.S.) and foreign (F) producers. The domestic producers have been complaining that foreign producers are dumping shoes onto the U.S. Calculate the price and quantity that would prevai..
Demonstrate and discuss the effects of imposing a new industry-wide minimum safety standard. Under what circumstances might such a minimum safety standard leave at least some workers better off than they were before government intervention?
Which of the following best describes the general policy of the United States towards Native Americans in the West in the later 1800s?
If Jim is putting money into a savings account. He puts in $100 monthly. At the end of each year he gets a $500 bonus from work that he also deposits. If the savings account has a 5% interest compounded monthly, what will his future savings be in 5 y..
compute the arc cross elasticity of demand?
To differentiate its product,a monopolistic competitive firm will engage in all of the following advertising practices EXCEPT
Consider a game where two players take turns deciding whether or not to take a pile of money. At the start of the game, there are two piles of money, one "large" pile with 5 dollars and one "small" pile with 1 dollar. Player 1 gets to choose whether ..
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