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Suppose a major brokerage firm advised its clients to buy cigarette stocks under the assumption that, if consumer incomes rise by 50% as expected over the next decade, cigarette sales will double. What is your reaction to this investment advice?
In 2010, Wonderlanders consumed 15 million liters of rum at an average price of $5 per liter. The Wonderland department of commerce has estimated that the price elasticity of the d
(40 points) Consider two consumers, A and B. A and B both want perfect consumption smoothing (c = cf) and both have no current wealth. However, the two consumers have different inc
You are the manager of a firm that receives revenues of $50,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is -3,
For this question you will use the dataset "march01.dat", which includes wages (column 1), age (column 2), a dummy variable indicating females (column 3), and years of education (c
Q. Explain about Household savings? Remember that consumption may refer to observed consumption as well as to demand for consumption. The same is true for 'household savings',
Can a nation's economy grow larger over time? How?
Two animals are fighting over a prey. The prey is worth v to each animal. The cost of fighting is c1 for the first animal (player 1) and c2 for the second animal (player 2). If the
Suppose P(X1)=.75 and P(Y2/X1)=.40. What is the joint probability of X1 and Y2?
Explain demand management of Keynesian economists The demand management of Keynesian economists of 50's and 60's is attacked by free-marketers for ignoring the importance of s
Q. Relationship between L and P? • As long as L is smaller than LB, L may change with no change in prices. In this range, there is no relation between L andP. • When L is betw
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