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The PPI is often regarded as a warning sign of inflation: because producers are more likely to have monopoly control over prices
The random-walk hypothesis (the permanent-income hypothesis with rational expectations) with no binding borrowing constraint?
The total cost function of firm 1 is T C (q1) = 0 and the total cost function of firm 2 is T C (q2) = 0. Solve for the Reaction Functions of firms 1 and 2.
Find the equilibrium price and quantity in the market for potato chips. Compute the consumer and producer surplus (or show what these are in a sketch that represents the situation in the market).
Derive the necessary conditions for an optimum using the Lagrangian. (2) Prove that MP K/ r= MP L /w in the optimum, and explain intuitively why this equation holds.
Draw the initial endowment, as well as a few indifference curves of Arnold and Brigitte in an Edgeworth box. Prove using the Edgeworth box whether or not the initial endowment is Pareto efficient.
Calculate profit for each quantity. How much should the firm produce to maximize profit? Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a
Denote the number of units produced (and sold) by firm 1 by q1 and the number of units produced (and sold) by firm 2 by q2. Express the inverse demand curve as a function of q1 and q2.
Offered discounts, as shown in the followinf table. which of the two suppliers should be selected if Thaarugo wishes to minimize total annual inventory cost? What would be the annual inventory cost?
How do individual firms in a perfectly competitive industry respond to an increase in the market demand for the product? Would advertising by individual firms in this type of market provide any ben
What happens to the dollar price that a U.S. (a) importer pays and (b) exporter receives if prices are agreed in euros and the dollar then appreciates by 10 percent with respect to the euro?
Jae's construction company has the following short-run cost function: q3 - 10q2 + 36q. What level of output will minimize the average cost? What is the AC at this point?
They sell many finished products abroad. Since they are happy about a low dollar, what must be true about the proportions of Caterpillar's imports and exports?
Determine the aggregate economic effects of the combination of the shock to the economy and the government's response to it."
Congestion cost of cars is E(Q) = 400 + 0.1Q. What is the socially optimal output of cars? At what price would marketable permits to produce that number of cars trade?
However, so that it loses $5,000 over those months, and just breaks even over the year as a whole. Wouldn't the restaurant do better by staying closed out of season?
If the person must pay 20 percent of any capital gain in taxes, which of the following is the after-tax real capital gain (in 2002 dollars) on the land?
In 2003, the money supply was $105 billion, and real GDP did not change from its level in 2002. What was the approximate nominal interest rate in 2003?
Draw the Edgeworth box diagram that represents the possibilities for exchange in this situation. What is the only exchange ratio that can prevail in any equilibrium?
Find out that Pacific Woods orders in quantities of 4,000 loads at a time. Ken knows that 4,000 loads is the EOQ for Pacific Woods. What is the annual demand in loads of plywood for Pacific Woods?
Suppose that the economy's total resources are 320 hours of labor and 20 acres of land. Use a diagram and some algebra to determine the allocation of resources.
What is the amount of tax revenue?What fiscal policy action might increase investment and speed economic growth? Explain how the policy action would work.
Start Now has a production function of Q = K1.2L0.5. Given that the price of capital (K) is $125 and the MRTS is K = L. How many units of capital and labour will be used to produce 1,000 units?
Does the farmer minimize costs by hiring nine workers and renting 10 acres of land? If not, which input should he use in larger relative quantity?
At the end of the 25-year period. For a MARR = 12% per year, what would be the maximum amount you would pay for the building and lot at the present time?