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Q1. Suppose Bob considers borrowing $100 from Sheila at a 10 percent interest rate. They both think that a 4 percent real interest rate would be fair.If the inflation rate turned out to be 8 percent, how much was the real interest rate? Who gained and who lost from this transaction, and how much because of unexpected inflation?
Q2. Demand estimation: Qxd = 100 - 3Px + 4Py - 0.01M + 2Ax. Where Ax represents the amount of advertising spent on shoe (x), Px is the price of good X, Py is the price of good Y and M is average income. Suppose good X sells at RM25 a pair, good Y sells at RM35, the company utilizes 50 units of advertising, and average consumer income is RM20 000. Calculate and interpret the own price, cross price, and income elasticity of demand.
Illustrate what will be the level of output and price in the long run if this industry were perfectly competitive.
The success of the apple ipad leads more firms to begin producing tablet computers. In the six months following the japanese earthquake and tsunami in 2011, production of automobiles in japan declined by 20 percent.
In what conditions will an increase in the price of a product lead to a reduction in total spending for that production.
How many popsicles will be sold/supplied each day in the short run if the price rises to $4 each per day
which good should the government impose the tax if it needs to maximize government revenue
Elucidate how managers can use price elasticity to discriminate or charge different prices among different groups of customers.
The country of Meditor uses the merit as its currency. What were its consumption and government expenditures on goods and services.
Utilize your general knowledge of equilibrium prices to explain why the previous interest rate is no longer sustainable.
Explain how will the market restrain economic freedom. Explain how will society produce goods and services at lowest cost.
Explain why does the profit motive does not automatically avoid air pollution in the production of steel and other products.
Illustrate what will occur to the equilibrium price also quantity of guitar strings
Senior citizens and students have a relatively less elastic demand compared to other potential moviegoers. The government requires lower prices for senior citizens and students. Senior citizens and students have a relatively more elastic ..
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