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An open economy has the following pattern of income and domestic expenditure:
Variable / Year
Year 1 (£)
Year 2 (£)
Year 3 (£)
National income
500
250
200
Government expenditure
Private consumption
300
Investment
50
For each of the three years, evaluate the balance of trade facing the economy.
Suppose that a chair manufacturer is producing in the short run (with its existing plant and equipment). The manufacturer has observed the following levels of production corresponding to different numbers of workers:
What might be included in the "total cost" of acquiring and watching movie on DVD? What about the "total cost" of seeing a movie at the multiplex?
Assume you hire a furloughed Wall Street analyst to aid you examine your production process, and she uses your historical cost records to estimate that your total cost function is C(Q) = 100 + 2Q + 3.5Q2. Using this equation, answer the following ..
A tariff I ssimply a tax on imports. Use our model of the excise tax (with diagram) to expain why domistic firms request that tariff? Consider both the domestic and the foreign country in your answer
At what price will she buy four visits? Eight visits? What is the elasticity of between a price of $5 and $6 per visit? Between a price of $29 and $31?
Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.
Suppose two identical firms produce widgets and they are the only firms in the market. Find out the Stackleberg Equilibrium.
Evaluate: "The fact that some airplanes collide is evidence there is 'too little air traffic control'." (Be sure to explain what too little might mean.)
A tariff is simply a tax on imports. Use our model of the excise tax (with diagram) to describe why domestic firms request that tariffs be imposed.
The following quotations are from an article in the Financial Times on November 9, 2007:
Global Widgets Corp is a manufacturing company that builds standardized galvanized metal benches for sports arenas and stadiums-Do you think one of these firms would be more likely to benefit from a de-centralized decision making organizational arc..
This problem uses Okun's law to study how the unemployment and inflation rates change when there are demand shocks.
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