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A consumer must divide $600 between consumption of products X and product Y. The relevant market prices are Px = $10 and Py = $40. a. Write the equation for the consumer's budget line. b. Illustrate the consumer's opportunity set in a carefully labeled diagram. c. Show how the consumer's opportunity set changes when the price of good X increases to $20. How does this change alter the market rate of substitution between goods X and Y?
Assume that the economy experiences a supply shock, such as an increase in energy prices. If the government tries to counter this cost shock (supply shock) by using expansionary fiscal policy/monetary policy, explain what will happen to the level of ..
What is the market equilibrium cost. What is the equilibrium number of firms in the market.
You are the manager of a new firm that can choose between two technologies for producing output using only labor. Technology A can produce two units of output for each hour of labor input. Technology B can produce three units of output for each hour ..
The Lorenz curve shows. An income distribution in which all households receive exactly the same income is referred to as a(n). Studies of income mobility show. Channeling people according to sex or race into particular occupations tends to
Compute and indicate the area of profits on your graph. In light of your answer above, does it make sense that this firm is "maximizing profits".
The current account balance may fall after a real depreciation because
q. abc company expects that it will receive a large order from the spain government. but the order occurs abc will be
From the e-Activity, assess how business leaders use managerial economics to make business decisions indicating how profits may be impacted.
Borrowing in the form of debt is riskier than borrowing in the form of equity. Explain why this is true.
Assume there are two health insurance plans, Plan A and Plan B. Plan A • $1,000 annual premium • $5,000 annual deductible • 50% co-insurance on health care spending between $5,000 and $7,000 • 25% co-insurance on health care spending between $7,000 a..
Assuming that the information required making decisions are held by lower-level employees, it makes sense to delegate decision authority to these employees. But, there must be trade-offs (because there always are). Speculate on the “costs” of delegat..
Explain how the adverse inflation shock affects the AS curve. (ii) Discuss, using AD-AS diagram, what choices the Fed now must make regarding monetary policy.
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