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The study of the overall aspects and workings of a national economy is like as income, output, and the interrelationship between diverse economic sectors. It is the study of all as
c) Explain why perfectly competitive markets lead to an allocatively efficient allocation of resources in the long run
Explain the concept of elasticity and describe why the supply of petrol in the short run is relatively inelastic.
1. Consider the market for a particular type of computer memory chip. Would you expect the long-run (own-price) elasticity of supply to be larger or smaller than the short-run elas
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 sa
(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
Q. Define the Real wage? Consider the following scenario. You work full time and during January 2008 you make 2000 euro after tax. A certain basket of goods and services costs
Consider the following macroeconomic model: Y = C + I + G + NX C = 100 + 0.8 YD I = 300 - 1000 i NX = 195 - 0.1 Y - 100 (E.R.) E.R. = 0.75 + 5 i M = ( 0.8
Determination of L in the cross model As firms will produce less than Y OPT , they require less labor than L OPT . We can determine exactly how much L they need in order to pro
Consider the following homogenous difference equation: xt=b0+b1xt-1 a) Iterate backwards xt can be written in terms of xt-2. b) Now show xt can be written in terms of xt-3 a
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