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Consider two policies-a tax cut that will last for only one year and a tax cut that is expected to be permanent. 1. Which policy will stimulate greater spending by consumers? 2. Which policy will have the greater impact on aggregate demand?
Let P = 53-Q be a consumer's long-run demand curve for gasoline, and P= 103-2Q be the consumer's short-run demand curve,
Suppose that a firm maximizes its total profits and has a marginal cost (MC) of production of $8 and the price elasticity of demand for the product it sells is -3. Find the price at which the firm sells the product.
For an unknown reason, aliens kidnapped all immigrants residing in the US. One morning America wakes up and finds that the only people left in the country are American citizens, while all legal and illegal immigrants are gone.
What happens to Market Equilibrium Price (MEP) if Supply decreases as Demand increases?c. What happens to Market Equilibrium Quantity (MEQ) after there has been an increase in Supply followed by a decrease in Demand which is followed by another in..
Much has been made of the fact that people don't consistently act with scientific rationality. What is meant by rationality Consider the three "systematic mistakes" discussed in your text. What are the costs of making those "systematic mistakes".
Discuss how the aggregate expenditure function shifts in response to changes in each of time following variables:
Assume first that Apple were to sell only 4GB iPods after all,they cost the same and some consumers prefer more than less. What is the optimal price for a 4GB iPod.
A firm has two production plants where they produce the same product. The cost function at plant #1 is A) If the firm wants to produce Q total units of output, what fraction of Q will be produced at plant #1? What fraction at plant #2? Show all wo..
If we assume most of the crime results from drug addicts stealing to buy drugs, what would happen to the amount of drug use and the amount of theft if we increased education programs to inform potential drug users about the dangers of drugs
Elucidate the mechanisms through which improvements in population health can lead to improvements in income levels.
Case study: rent ceilings in New York City. Suppose the demand and supply curves for rental housing units have the typical shapes and that the rental housing market is in equilibrium. Then, government establishes a rent ceiling below the equilibri..
In a perfect capital market, advices for a corporate financial manager on making capital structure decisions.
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