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Suppose prices are equal in Europe (in euros) and the US (in dollars) at the end of 2006. In 2007, prices increase by 3% in Europe (in euros) and 1% in the US (in dollars). According to PPP, the euro should appreciate or depreciate? By how much?
There are 20,000 hours of labor for country A. 5 hours of labor are required to produce 1 unit of S, while 4 hours are required to produce 1 unit of T. Find the shape and dimensions of country A's PPF.
William owns just one ship. Ship is worth 200 million dollars. The probability the sink will ship is .02. His total wealth including the value of the ship is 225 million. U(W) is equal to the squre root of W. What is the maximum amount that william w..
Consider the Rubinstein bargaining model of dividing $1 between A and B. A makes the first offer. If B accepts the offer then game ends. If B rejects the offer then B makes an offer to A in the next day. Suppose the bargaining game lasts for 4 days. ..
The Pennsylvania Consumer Protection Agency (PCPA) investigates the marketing practices of Respond Now!, Inc. The PCPA serves a subpoena on Respond Now!, ordering the firm to provide certain business records, including its marketing agreements with o..
A war in the Middle East takes the most cost efficient oil fields out of production for several years. Describe what would happen to the oil market during the war. A tanker runs aground in Alaska, cutting off 5 percent of the world’s oil supply. At t..
In chapter 15, we discussed several different pricing tactics aimed at consumers. Which of these do you respond most favorably to? Why? How might this be impacted by the type of consumer (lifestyle, demographics, etc.)? (marketing class)
If the Federal Reserve changes the reserve ratio in the economy from 10% to 5%, explain the effect this will have on the broader economy (e.g. GDP) in the short run and the mechanism for it happening. Use both the Quantity Theory of Money and the M..
Suppose that the hourly output of chili at a barbecue (q measured in pounds) is characterized by: = 20SQRT(KL) , Where K is the number of large pots used each hour and L is the number of worker hours employed. Calculate the rate of technical substitu..
“Teams, schmeams!” gripes your boss. “We have 100 workers making sleeping bags. Our costs our determined by the prices we pay for supplies and workers, and there’s not much else we can do.” Explain to your boss why team production may be important fo..
Annual sales of a given product are 8,000 units; the selling price is $8 per unit. Annual fixed production costs are $6,000 and the current annual profit is $18,000. The company is planning to invest to influence the sale of its product. Determine th..
This question considers long-run policies in Turkey (T) relative to its largest trading partner: Europe (E). Assume Turkey’s money growth rate is currently 15% and Turkeys output growth is 9%. Calculate the expected rate of depreciation of the Turkis..
Discuss the impact of the minimum wage when there are two sectors in the economy, one is subjected to the minimum wage and the other is not.
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