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The highway system in Canada was built mostly with federal grants. Since there are many thousands of kilometers of these highways approaching the end of their useful lives, maintenance costs will exceed the about of most provinces to pay. Consequently, there have been suggestions that these highways should be "privatized."
Discuss, relating in part whether such highways are public goods and whether or not privatization should work.
Let the market demand for rye bread be given by Q = 500 + I - 250P rye + 400P wheat , where Q is monthly demand in number of loaves, I is average monthly income in dollars
Find the optimal level of inputs L* and K* that minimize the cost of producing Q0. What is the cost of production associated to L* and K*?
Provide brief but theoretically sound explanation for each of the following.
For a perfectly competitive firm the price is $2 per unit. At this price the firm is producing and selling 10,000 units. It costs $1.50 to produce the last unit. Should the firm produce more? Less? Why?
In the 1970s people had become accustomed to high inflation. In 1979, Bank of Canada decided to fight inflation and decreased the money supply growth rates.
In which of the following circumstances is expansionary fiscal policy more likely to lead to a short-run increase in investment? Explain?
Describe how a change in investment can have big impact on GDP causing a nationwide slump. Recall that investment is "small" relative to the entire economy.
Fill in the table indicating whether the new Each row and column heading describes a shock to a market initially in equilibrium. Fill in the table indicating whether the new equilibrium price and quantity will increase, decrease, or not change.
According to economist, if savings equal $5 trillion and spending equals $100 trillion, what will investment equal?
Explain what accounts for the Hong Kong Monetary Authority behaving differently than the other central banks in emerging Asia.
Suppose that there is an "inflation scare," that is, suppose market participants increase their expectations of future inflation.
Assume that the soft coal industry is a competitive industry and it is in long run equilibrium. Now assume that the firms in the industry form a cartel.
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