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a. With a high and growing US trade deficit, many hope that a depreciation of the dollar would help close the deficit. Explain the logic behind this prediction.
b. The US has faced both a trade deficit and a budget deficit, often referred to as 'win deficits'. Explain how these two deficits are related. Show how an increase in the budget deficit is likely to be associated with a deepening of the trade deficit.
What effect will each of the following have on the supply of automobile tires?
Consider a firm with total short-run cost function C=a+b.Q. New legislation means that it should pay an environmental tax which is the fixed sum, independent of whether it produces any output.
The industry has been very fragmented, so that few companies have the financial backing to make heavy investments in new technology and equipment.
Always Round Tire has a production function of Q = 300 L.75 K.5. In the short run, if L = 250 and K = 25, what happens to the output of tires if L jumps to 300 and then 350. What law does this illustrate?
What is the Marginal Cost? What is the Average Cost? What is the optimal production level where production costs are the lowest per unit?
A monopoly has demand given through P=20,000-25Q, and costs given through C(Q)=100Q+25Q2. Find the profit maximizing level of price and output.
Define depository institution, and discuss types of depository institutions are found in the U.S. and how do they act as intermediaries between savers and borrowers?
Employing the new factory would ultimately reduce average total cost and the present value of the gain from employing the new factory must be less or equal to $50 million.
Explain two different markets where has been a market disequilibrium. That is, there is a shortage or a surplus. Briefly explain the supply and demand curve.
Economic opportunities happen from nations which develop industries in which they have a comparative advantage and describe the concept of comparative advantage.
A new contraption to help you eat yogurt easily while driving, autogurt, is now on the market. It costs Justin $2 in equipment per unit, and takes him approximately 6 min to make. Justin charges $20 per hour. Justin additionally pays an electricit..
Mention two economic choices you had to make with in last week. Alfred Marshall said in 1890s, "economics is the study of man in ordinary business of life." You must examine one or two of these choices in terms of alternatives you gave up.
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