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Consider the two economies shown in Figure 3.1. When there is free trade, are we sure that each country should specialize completely in producing only one of the products? For instance, perhaps each country should shift along its production-possibility curve only about halfway from the no-trade production point S0 to the intercept point S1. If the countries still traded with each other at the relative price of 1 W/C, would producing at the halfway point be better or worse for each country (compared to completely specializing at point S1)?
A new Taurus bought in 1994 cost $18,680 and it could have been sold as used in 1995 for $12,600.
In considering the international realm, let’s consider the concept of economic treaties. Specifically, let's think about an organization like the European Union (EU). Why was it formed? In addition, what are some of the objectives of the nations that..
If your goal is to stabilize output, explain how you would change the interest rate in response to the following events (or shocks). In each case, show the effects on the economy in the short run using the IS-MP diagram. Consumers become pessimistic ..
A small university with many competetiors has determined that the price elasticity of demand for its services is equal to -2.5. The university Board of trustees is considering rasing tution by 10% to generate additional revenues. Is this likely to be..
Consider a market where demand is D: P = 24 – Q and supply is S: P = 2 + Q. 1. Equilibrium quantity Qe is a. 10 b. 11 c. 12 d. 13 2. Equilibrium price Pe is a. $11 b. $12 c. $13 d. $14 3. Consumer surplus CS is a. $50 b. $55 c. $60 d. $60.5 4. Produc..
Calculate the standard deviation of annual sales. Calculate the coefficient of variation of annual sales.
There are 20,000 hours of labor for country A. 5 hours of labor are required to produce 1 unit of S, while 4 hours are required to produce 1 unit of T. Find the shape and dimensions of country A's PPF.
The loss to society resulting from a tax includes the
Kelly went to watch her school's basketball game. She found that the height of basketball players is taller than the average height of her school's students. So she concludes that if you play basketball, you will be taller. What mistake she made in h..
Hampton Industries had $60,000 in cash at year-end 2015 and $17,000 in cash at year-end 2016. The firm invested in property, plant, and equipment totaling $240,000. Cash flow from financing activities totaled +$190,000. Round your answers to the near..
Suppose there are two firms with one demand function. This same (common) demand function is: What are the optimum prices (Ps) and quantities (Qs) for each firm? Which firm, firm #1 or firm #2 produce more and why? Long run average cost curve decrease..
How do segmentation of global financial markets, government incentives to attract direct foreign investment (DFI) and variation in national tax rates allow multinational corporations to lower their cost of capital compared to single country corporati..
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