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To what extent do you think differences in views between advocates of less spending on public goods and advocates of more spending can be attributed to different assessments of the marginal cost of public goods, including the increased distortions associated with the additional taxes required to finance public goods? What are the other sources of disagreeement?
Discuss. “The internationalization of banking has weakened national safeguards against banking collapse, but at the same time it has made the need for effective safeguards more urgent.”
Firms pay efficiency wages because these wages:
How is the US Economy like a small, open economy? How is it like a closed economy? What is the relation of the domestic interest rate to interest rates in the rest of the world?
Demand Pull Inflation: Suppose that the central bank wants to increase output, but the economy is already at the natural rate. Show the short and long run effects of a monetary expansion in this situation in the AD/AS model. You can omit the labor ma..
Sally Rand owns a ceiling fan company. She sells 1,000 ceiling fans at $50 each. Each fan costs her $20. She uses her own money to buy the fans; she withdraws the money from her savings account where it earns 5 percent interest. Before going into the..
Does the covered interest parity condition hold? Why or why not?b. How could you make a riskless profit without any money tied up assuming that there are no transaction costs in buying and or selling foreign exchange?
Jeff is a risk-neutral middle-aged American. The data on his computer is worth $2000. If his computer gets a virus, he will have to spend $600 to restore the data. Alternatively, he can purchase Norton Antivirus for $100. If he believes there is a 50..
List the economic benefits of, and problems with, subsidized college education. Examine subsidized college education by considering answers to the three basic economic questions: What to produce with limited resources? How to produce the goods and se..
The idea that a person wants to have a bigger house in order to outdo his or her neighbors is referred to as:
Question 1: Two firms compete in an undifferentiated Bertrand market. Suppose that the firms face a demand curve given by P = 80 - Q and both firms have constant marginal cost of 60.
Priority Mail has been one of the most profitable products for the U.S. Postal Service, growing six times faster than first-class deliveries over the period from 1995 to 1999 and accounting for almost 8 percent of the Postal Service’s mail revenue. Y..
Determine marginal product of labor. Show whether or not the above production function exhibits diminishing marginal productivity of labor. Calculate the output (or production) elasticity with respect to labor. Determine the nature of the Return to S..
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