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The relationship between sticky input prices and flexible output prices explains:
the positive slope of both the short-run and long-run aggregate supply curves.
the negative slope of the short-run aggregate supply curve.
the vertical slope of the long-run aggregate supply curve.
the negative slope of the aggregate demand curve.
the positive slope of the short-run aggregate supply curve
A firm that makes car parts wants to adopt pay schemes that will best motivate its various workers to be productive and they hire you as a consultant. The firm is able to accurately measure the productivity of individual workers who make windshield w..
Assume that demand for a commodity is represented by the equation P = 10 – 0.2 Q d, and supply by the equation P = 2 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium conditio..
Consider a monopoly where the inverse demand for its product is given by P = 50 ? 2Q. Total costs for this monopolist are estimated to be C(Q) = 100 + 2Q + Q2. At the profit-maximizing combination of output and price, deadweight loss is:
Suppose a large number of new immigrants enter the labor market. Assume this increase in the supply of labor provides a drag on wage increases: wages rise by less than the prevailing rate of inflation over the next year. Use the short-run model to ex..
What the slope of the budget constraint? Why is it this value? What is the endowment point? Why must changes in the interest rate cause a rotation in the budget constraint about this point?
Ace Manufacturing is building a new facility that will cost $44M. Ace will borrow $40M from First National Bank and pay the remainder immediately as a down payment. Ace will pay 7% interest but will make no payments for 4 years, at which time the ent..
The long-run aggregate supply curve
Becky has income of $1000 today and $500 tomorrow. Becky can lend and borrow at an interest rate of 10%. There is 5% ináation. Her preferences for intertemporal consumption are represented by the following utility function u(c1; c2) = minfc1; 2c2g. W..
Describe a potential capital expenditure project from the industry in which you now work or an industry in which you are interested. What is the project? Describe and provide an approximate value of the initial cash flow. Describe and provide an appr..
What is the profit-maximizing p in the case that Godzilla and Macrosoft merge and suppose that Godzilla chooses its price first, and that Macrosoft only picks its price after observing Godzilla's price. Is the equilibrium price of the composite go..
The demand for cars in Home is q = 30 – P and the supply of cars in Home is q = P. The demand for cars in Foreign is q = 10 – P and the supply of cars in Foreign is q = P. Calculate the autarky equilibrium price and quantity in each country. Who is t..
In the ‘Classico’ Region within Tuscany, all producers of Chianti wine must submit their wines to a government inspection process which certifies that only grapes grown in the Classic region have been used in the wine. All wines which pass this test ..
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