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One of the main tenets of economic analysis is that people act in their own narrow interests. Why, then, do people leave tips in restaurants? If a study were to compare the size of the tips earned by servers in roadside restaurants with those frequented mostly by locals, what would you expect to find? Why?
Income and Substitution Effects of a Price Change Indifference curve analysis can be used to separate the income effect (IE) from substitution effect (SE). This is shown in Fig
#C=100+0.8yd G=100 T=0.25y X=150 M=0.25yd 1) What is the level of equilibrium national income? 2) Estimate the budget surplus or deficit at the equilibrium national income. 3) Deri
In 1 to 2 sentences respond to the following comment. "Pollution restrictions will reduce gross domestic product and therefore hurt the economy."
Review the Federal Reserve Board website. Identify at least five key pieces of data (links) you would use in microeconomic decision making on the Web site, and tell what data that
who are cheap money;gainers and losers
Equilibrium Income The next step is to use the aggregate demand function, AD, to determine the equilibrium level of income and output. This is done in figure . Recall that the
Money is generally considered to have three economic functions: A medium of exchange. This is its most significant role. Without money we would live in a barter economy wher
A telemarketer makes six phone calls per hour and is able to make a sale on 30 percent of these contacts. During the next two hours, find: A) The probability of making exactly four
Suppose the banking system has reserves of $750,000, demand deposits of $2,500,000 and a reserve requirement of 20%. a) If the Fed now purchases $125,000 worth of government bon
The Government, Rest of the World and the financial markets Total expenditure of the government may be divided into two parts: transfers to the private sector and consumpti
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