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Clarification of Elasticity
Suppose that Americans decide to increase their saving.
a.If the elasticity of U.S. net capital outflow with respect to the real interest rate is very high, will this increase in private saving have a large or small effect on U.S. domestic investment?
b.If the elasticity of U.S. exports with respect to the real exchange rate is very low, will this increase in private saving have a large or small effect on the U.S. real exchange rate?
You work for an unemployment agency that distributes unemployment checks to unemployed workers in your state.
Imagine that the firm must choose one of three quality levels: z = 1; z=2; and z = 3. Which quality choice will maximize the firm's profit?
Draw a diagram showing the current situation of the firm. In addition to the above information, suppose the price of the output is $13/unit, if the firm wants to maximize its profit, what should it do? Explain in detail with the aid of a diagram.
Mention and explain the two types of inflation. Which sort of inflation would most likely be associated with the negative GDP?
Define in general the term "internalize the externality" and explain its application in this case. Discuss a policy other than a tax or subidy that could cause individuals to internalize the externality. Explain briefly.
All semester we have been tracking the economy to discern where it currently resides along the business cycle and where it seems to be headed over the next 6-9 months.
Plot both together on a supply-demand graph. Calculate the equilibrium P and Q, and show them on your graph as well. Also calculate CS (consumer surplus) at the equilibrium.
A symetric information can have deleterious effects on market outcomes. Discuss a few tactics that managers can use to overcome these problems.
You're the manager of a paper mill and have been subpoenaed to appear before a joint session of the Senate Consumer Affairs and the Senate Environmental subcommittees.
Assume that there're 10 million workers in Canada and South Korea and each worker in Canada and South Korea can manufacture four cars per year.
Determine the profit-maximizing prices both firms will charge. In addition, calculate the price-cost margin for each firm and indicate which has more pricing power and why.
Suppose a friend you know requires a mortgage loan to purchase a house. Your friend can purchase it now or wait until later and is unsure of what to do.
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