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Question 1: (a) Distinguish between the short run and long run profits of a competitive firm by using graphical representations. (b) Compare and contrast between perfect c
I. Consider the following static optimization problem. Suppose that a consumer has financial wealth W and owns the house H¯ . She has utility over housing H and nonhousing co
This problem substitutes financial health with housing in a 2 period consumption savings model. The representative consumer has the utility function u(c1, c2) = lnc1 + lnc2 with ea
give and explain national income variation
Give examples of a monopoly and an example of perfect competition. Explain how each of your examples matches the textbook's definition of that market structure. Monopoly-a firm tha
Q. Important points about the classic model? The most important points about the classic model are as following: Monetary and fiscal policy can't affect the GDP or unem
Explain the multiplier effect with example Deposits and loans in banks give rise to an important multiplier effect. We use a simple example to illustrate this effect. Consider
factor for long run trend of term of trade
Potatoes cost Janice $1 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. If she feels that the first pound of potatoes is worth $1.50, the sec
#“Nominal GDP declined between 2008 and 2009, therefore the GDP deflator must also have declined.”
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