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Briefly discuss Allais paradox and Ellsberg paradox and explain why they cause problems for expected utility theory.
Suppose that two things happen simultaneously in the market for fish.
By now it is very easy to find facemasks; however, at the beginning of the pandemic facemasks were scarce.
What do you think is the future of such predictive capabilities?
Elucidate how did it manifest itself. If the person received counter conditioning to correct the condition, Illustrate what were the results
Suppose that the Fed permanently increases the growth rate of the money supply. According to the Friedman effect as discussed in class, what will happen to both nominal and real interest rates in the short-run? In the long-run? Explain why.
Illustrate what happens if the consumer faces a borrowing constraint that prevents her from borrowing.
Is there any range of production characterized by scale of economies. At Illustrate what production level are scale economies exhausted.
Consider a low-wage labour market. Workers in this market are not presently covered by the minimum wage, but the government is considering implementing such legislation. If implemented, this law would require employers in the market to pay workers a ..
Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient.
How does your saving and spending profile change depending on the state of the economy, whether the economy is in a recession versus expansion?
Assume that apples are an inferior good. Draw a perfectly competitive market for apples and a firm selling apples in the long run equilibrium where price is $10 and the firm’s equilibrium quantity is 50. EXPLAIN what happens in the short-run if custo..
You are the manager of a firm that receives revenues of $60,000 per year from product X and $90,000 per year from product Y. The own price elasticity of demand for product X is -1, and the cross-price elasticity of demand between product Y and X is 1..
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