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1. Why are prices sticky? Explain the two reasons given in this chapter and then try to think of two more.
2.Why do some economists believe that better inventory control software may help to reduce the frequency and severity of recessions? Could differences in technology explain why recessions appear to be more frequent and more severe in poorer countries?
the Cadillac motor Car company is advertising a 24-month lease of a Cadillac Devil for $520 payable at the beginning of each month. The lease requires a $2,500 down payment plus a$500 refundable security deposit.
The government is considering two policies: 1) in kind transfers of paper vouchers to families that can be exchanged for food or 2) a direct cash payment (of an amount equal to the value of the paper vouchers) that can be used for any purpose.
Show that licensing can be beneficial for firm 1 in this case and therefore increase innovation incentives. Explain why the results differ between the two cases.
Assume a depository institution holds vault cash of $3 million, reserve deposits at the Fed of $25 million, and has borrowed $2 million from the Fed's discount window. If that institution holds $300 million in transactions deposits and is subject ..
Defend your answer with information and examples from chapter 1and/or chapter 2 of Freakonomics and your own experiences and observation.
According to the figure, what share of the per unit tax on bags of coffee beans is paid by the buyers and what share is paid by the sellers?
Use the diagram for this exercise to draw a level of aggregate expenditures that would lead to an economy at an equilibrium, E, with a real GDP of $8 trillion.
List the economic benefits of, and problems with, subsidized college education. Examine subsidized college education by considering answers to the three basic economic questions:
Over the last one year the Four Winds Novelty Corporation has recorded its internet sales and its monthly total variable costs for a particular novelty item as demonstrate in the following table.
In addition, Mexico does much more trade relative to its GDP. Explain these differences using the gravity model.
HealthPlan Northwest must install a new $1 million computer to track patient records in its three service areas. It plans to use the computer for only three years, at which time a brand new system will be acquired that will handle both billing and..
The manager of a weekend flea market knows from past experience that if he charges x dollars for a rental space at the flea market, then the number of spaces he can rent is given by the equation y = 200 - 4x.
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