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Two separate capacity constraints are discussed in this chapter:
(1) the actual physical capacity of existing plants and equipment, shown as the vertical portion of the short-run AS curve, and
(2) potential GDP, leading to a vertical long-run AS curve. Explain the difference between the two. Which is greater, fullcapacity GDP or potential GDP? Why?
Find the optimum commodity purchases for a consumer whose utility function and budget constraints are U=(x^1.5)(y) and 3x+4y=100 respectively. a. Show that the first-order conditions for a constrained utility maximum.
If the CPI was 110 last year and is 121 this year, what is this year's rate of inflation In contrast, suppose that the CPI was 110 last year and is 108 this year. What is this year's rate of inflation What term do economists use to describe this..
A company is considering purchasing a fleet of delivery vans which are available with either a diesel or gasoline fueled motor. The gasoline powered van has an initial price of $29,750, the diesel powered one costs $32,250. Both vehicles have a sa..
Sheila budgets $9 per week for her morning coffee with milk. She likes it only if it is prepared with 4 parts of coffee and 1 part milk. Coffee costs $1 per ounce and milk costs $0.5 per ounce. How much coffee and how much milk will Sheila buy per..
Calculate the rate of price change between 2000 and 2001 and label this rate as either deflation, disinflation, or hyperinflation. Calculate the rate of price change between 2001 and 2002 and label this rate as either deflation, disinflation, or h..
Two Firms, CS Corp. and JL & Associates make identical goods and sell them in the same market. Market demand is given by Q = 1200 -P . Once a Firm has built capacity, it can produce up to its capacity each period with a marginal cost of MC
Using a supply and demand diagram for the market for money, show what happens to the equilibrium level of the interest rate as aggregate output falls. What does this imply about the slope of the LMcurve?
Now suppose that the gross national debt initially is equal to $2.5 trillion and the federal government then runs a deficit of $100 billion: i. What is the new level of gross national debt ii. If 100 percent of this deficit is financed by the sale o..
When it is 105 degrees outside and you get thirsty, how much you willing to pay for a 16-ounce bottle of water. If the price is $1.50 per bottle, do you have a consumer surplus or is there a producer surplus or both
Insuring the voices of the lead vocalists in Metallica, Black Eyed Peas, Incubus, Evanescence, Green Day, and Jurassic Five.
A certain reaction was run several times using each of two catalysts, A and B. The catalysts were sup- posed to control the yield of an undesirable side product
A. Calculate the 1998-2008 growth rate in sales using the constant rate of change model with annual compounding.B. Forecast sales for the years 2011 and 2013. The following table shows annual sales data for Stuff Happens.
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