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Explain the production function and discuss why it is important? Explain diminishing returns to an input and give an example? Discuss why a firm's cost curve might be different in the short-run versus the long-run?
Suppose that Ana is buying only 2 goods: good 1 and 2. If the price of good 1 doubles and the price of good 2 drops by one third, then what happens with the budget constraint? (Ass
Why did housing prices rise rapidly during 2002-2005? Why did the mortgage default rate increase so sharply during 2006 and 2007 even before the 2008-2009 recession began?
Consider the following game [payoffs are in the form: (Ann, Bob, Carol)]: a) List each player's actions and strategies. b) If Ann "buys" Carol's position in the game (i.
Design a hypothetical ideal randomized controlled experiment to study the effects on highway traffic deaths of wearing seat belts. Suggest some impediments to implementing this exp
Neo-classical synthesis is a synthesis of classical model and Keynesian model. In brief, it states that Keynesian model is correct in the short run whereas the classical analysis i
Suppose that Lilistan has two types of citizens: low-income citizens (income = $20,000) and high-income citizens (income = $80,000). Interest income is currently taxed and each typ
Marginal propensity to SPEND refers to: a. a nation's additional spending on a good per an additional unit of expenditure. b. a nation's additional consumption based on a unit incr
Let the real interest rate, i r , equal 5 percent and the rate of depreciation, d, equal 10 percent. In this case, if the price of a piece of capital is P K = $10,000, what is th
Overnight target rates and inflation One of the main targets of every central bank is a low and stable inflation. It's main control variable is the overnight interest rate targ
How are individual makes choices? Fundamental principles behind the individual choices are as follows: 1. Resources are scarce . 2. The real cost of anything is what y
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