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If the price of manufactured goods rises to $6 bushel (a rise of 50%), the parity price of corn as well rises by 50% - to $4.50 in this hypothetical example.
Price Discrimination: Assume that United Airlines knows that it faces the following demand equations and corresponding marginal revenue equations for its (one-way) SFO to Las Vegas route
How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.
What were some of causes of stagflation of 1973 and 1979? In what ways were these episodes of stagflation different from great depression of the 1930s?
In the country of Wiknam, the velocity of money is constant. Real GDP grows by 5 percent per year, the money stock grows by 14 percent per year, and the nominal interest rate is 11 percent. What is the real interest rate?
Shelly's preferences for consumption and leisure can be expressed as. This utility function implies that shelly's marginal utility of leisure is C-200 and her marginal utility of consumption is L-80.
Explain the concept of externality. What does it have to do with the efficient allocation of resources?
Assume that the exchange rate between the Canadian dollar and the Euro is 2 Euros per Canadian dollar.
Describe what effect an expansionary fiscal policy would've on the price level and real GDP starting from full employment equilibrium.
Explain how advertising can be employed to allow Tots-R-Us to keep price average above cost without encouraging entry.
Suppose that a chair manufacturer is producing in the short run (with its existing plant and equipment). The manufacturer has observed the following levels of production corresponding to different numbers of workers:
Changes in government spending and interest rates
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