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Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0
Q. Define the Labor Market? A significant macroeconomic variable is the total amount of labor which is used in a certain time period. Amount of labor and amount of capital are
We will continue with the familiar demand curve homework the previous section Let the market demand for goods be with a linear curve: (p =A q D /10), where it is known
An example of direct foreign investment is given by: a. The sale of U.S. government bonds to foreigners. b. The sale of U.S. stocks (equities) to foreigners. c. A multinational cor
Private sector in the circular flow The private sector total income is known as the national income. Because private sector receives the entire return from the factors of pr
c) Explain why perfectly competitive markets lead to an allocatively efficient allocation of resources in the long run
Suppose that a paper mill "feeds " a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit o
Marginal Propensity to save (MPS) is the ratio of change in total saving to change in total disposable income. Symbolically, MPS = ?S/?Y For example, total
Gasoline, insurance, depreciation, and repairs are all costs of owning a car. Which of these can be considered opportunity costs in the context of each of the following decisions?
In January of 1997, the U.S. Consumer Price Index (CPI) stood at 159.1. By January of 2008, the level had risen to 211.1. What was the average annual rate of inflation over this ti
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