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Second-price sealed-bid auction. There are 20 bidders. Each bidder i values the object at vi > 0. The indices are chosen in a way so that v1 > v2 > ... > v20 > 0. Find a Nash equilibr
Briefly describe the model of aggregate demand and aggregate supply. Which macroeconomic variables does it explain? Which factors determine aggregate demand?
Why does the assumption of independence of risks matter in examples of insuraces? what would happen to premiunms if the probabilities of houses burning were positively correlated?
Describe and explain the modern consumption theory. What is investment expenditure? Why is it so important for an economy?
"The short-run elasticity of demand for gasoline is estimated to be about $15.00, but the long-run elasticity is about 0.9. Explain, based on the determinants of elasticity, why the short-run elasti
If the price at which wheat can be sold is $5 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 10 acres?
A health club sells 50 memberships when the monthly price is $60 and 70 memberships when the monthly price is $40. The price elasticity of demand for memberships at this health club is (using the av
If three-fourths of Crusoe's output is consumed and the rest is invested, calculate Crusoland's GDP with both the product and the income approaches and show that they must agree exactly.
State the basic difference between accounting and economic profit. Which profit is more useful far making effective managerial decisions?
You can use monetary and fiscal policies to affect aggregate demand, but you cannot affect aggregate supply in the short run. How would you respond to: A surprise increase in investment spending.
Describe how international trade affects our economy. How the concept of comparative advantage was relevant to the trade negotiations? You may use the following scenarios in your discussions. Imagi
By what % will demand change if Airbeam cuts its price by 10%? Gasoline prices are estimated to rise by 20%. Given that Airbeam wants to increase its unit sales by 5%, by what % should it change its
Disuss the qualitative effects on the demand for money in the increase in the use of the credit cards
Explain how the wage can adjust to balance the supply and demand for labor while simultaneously equaling the value of the marginal product of labor.
Explain how inflation can have redistributive effects in the economy. Do you think the Federal Reserve over-emphasizes inflation as a policy concern? Why, or why not?
To model the individual's choice of the number of medical goods to consumer, carefully describe two important differences between Frossman's model of health consumption and the standard model of co
If all the assumptions of perfect competition hold, why would firms in such an industry have little incentive to carry out technological change or much research and development? What condition would
Assume that any money lent by a bank is always deposited in a checkable deposit and that the reserve ratio is 10%. The Fed purchases $100 million in Treasury bills. What is the effect on the value o
Which of the following describe the rising distortionary effects of taxes in the economy:
Sales in joint facilities are lower than sales in two separate facilities. What do these numbers imply for the decision of when to open a shared facility versus two separate facilities?
What is the slope of the leakage schedule? Also, if a bank has $5 in vault cash plus $200 in liabilities with a required reserved ratio of .20 and a desired excess reserve ratio of .05 is the $5
In recent decades, women have worked more hours in paid jobs and fewer hours in uppaid housework. Explain how this increase in work hours affect GDP.
Discuss the impact of rational self-interest on each of the following decisions:
How many of the variable input should the firm use to maximize profits? Please verify. Note that in order to do this you need to use costs. What are the mx profits the firm can earn if it sells the Q
When developing short-run cost curves, it is assumed that all firms in perfect competition have the same cost curves and they all make identical short-run profits or losses. Contrast this to the re