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In order to financially stimulate the nation, the Federal government injected $900 billion dollars into the economy. However, the results were less than spectacular. One reason could have been a failure to understand the marginal propensity to consume. Assume the marginal propensity to consume (MPC) was only 0.5. How much of that $900 billion went to increased consumption? Where did the rest of the money go?
The main tool that the federal reserve uses to conduct monetary policy is
Elucidate, using diagrams where appropriate, explain how the averege costs of a firm may vary short period and long period.
Explain how the “incidence” (i.e. “Who pays the tax”) of a per-unit tax on transactions depends upon the slopes of the supply curve and the demand curve. You may utilize graphical analysis to explain your answer as well
Suppose there are two firms, Boors and Cudweiser, each selling identical-tasting nonalcoholic beer. Consumers of this beer have no brand loyalty so market demand can be expressed as P = 5 − .001(Qb + Qc). Boors operates with out-of-date technology an..
Which resource of production is the only one which nations can significantly increase in the short term.
What are the economic justifications of the size premium? In factor pricing models like the intertemportal capital asset pricing model (I-CAPM) or arbitrage pricing theory (APT), it is assumed that exposure to one of these factors represent exposure ..
What may account for the difference in the wages between two industries that have been highly competitive? Identify and describe each factor and explain its effect on wages. If you make any assumptions about the scenario, state them.
Explain how externalities, public goods, and asymmetric information are all problems with private property rights.
Consider a country’s trade off between the production of two ‘goods’: environmental quality (extent to which their environment, including air and waters, are clean), and all other goods. Why is there a trade off? Explain.
Illustrate how increase in human capital affects production function. Blue line (circle symbols) in graph below shows production function.
Read the "Production and Cost Analysis in the Fast-Food Industry," Case for Analysis located below. Identify how the Law of Diminishing Marginal Returns set in for the production process, and how management responded to this situation.
Suppose that U.S. government actively uses the fiscal policy to fight against recession and rising unemployment. To incorporate this behavior of government into the model, let’s assume that the government spending equation is given by where 0. Assume..
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