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In response to the Great Recession a number of European governments adopted aus- terity policies which cut government spending on goods and services. Assuming no change in autonomous consumption or in autonomous investment, explain whether such an austerity policy would be expected to counter a decrease in output associated with a recession.
Explain how much additional profit do you earn using a two-part pricing strategy compared with charging this customer a every-unit price.
Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 25,000 cases of cola were sold every week at a price of $7 per case. After the tax, 18,000 cases of cola are sold every week; consumers pay $8 per case (includin..
do you think the price of crude oil has produced an upward or downward supply shock, or neither? How can you tell? Looking at historical data, when did the most recent oil-related supply shocks occur?
Why these former employees faced difficulties because the market for their very technical skills was declining. These workers were.
If farmers were to decry the effect of this new technology on the price of milk and lobby government to set the price of milk at the price before the invention, elucidate the result.
The money, or financial, multiplier is equal to 1/ the reserve requirement, that is, Mk = 1/RR. Assume that RR = 20%. What is Mk? Now assume that the reserve requirement is lowered to 10%. What is the new Mk? What would happen to Mk if the RR were ra..
Let us assume you and ten of your friends are going to open and invest in a business. You do not want to pay double taxation on the profits. You want a type of ownership where profits must be distributed based on how much each person has invested ..
The EU is the biggest common market worldwide. Please name the most important facts that describe the size and importance of this market.
Find the total revenue of the monopolist when it sells 6 units of the commodity without practicing any form of price discrimination. What is the value of the consumers' surplus?
Why might M1 and M2 grow at very different rates during a given year? If excessively rapid growth in the money supply is associated with all inflationary episodes, why do central banks ever allow the money supply to increase so rapidly?
Suppose that there are 10 million unemployed workers in a country and 90 million employed workers. Suppose we know that the fraction of workers who lose their jobs in a given month is .02 and the probability that unemployed workers find work in a giv..
Find the equilibrium price and quantity algebraically. If tourists decide they do not really like T-shirts that much, which of the following might be the new demand curve.
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