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What do the distinctions between short-run aggregate supply and long-run aggregate supply have in common with the distinction between the short-run Phillips Curve and the long-run Phillips Curve? Explain.
If the price elasticity of demand of a product is -5, and the income elasticity of demand for the product is 2.5. If a 0.5 % decrease in product price as accompanied by a 1% decrease in consumer income, the firm's total sales will?
A firm sells diving masks to two market segments. Segment A has a demand curve given by P = 80 – 2 QA, while Segment B has a demand curve given by P = 60 – (1/2) QB. The firm has fixed costs of $300 and a constant marginal cost (MC) of $16. Calculate..
The average total cost of a monopolistic firm is AT C = 80/Q + 20Q. The firm is facing the demand function given by P = 6000 − 20Q. a) What will be the total profit that this firm will generate if it chooses price and quantity optimally?(Profit=22492..
You are taking a vacation in Italy in December and calculate that the expense in Euros will be €900 (you will pay once you arrive in Italy). The exchange rate today is 0.76 Euros per US Dollar. Would you be happy or sad if the exchange rate in Decemb..
Discuss the policy tool(s) the Federal Reserve has been using in the last year or two. What benefits does this tool have? Is it effective in supporting the money supply?
Inflation is a sustained rise in the average price level. An increase in aggregate demand can cause demand-pull inflation. A decrease in aggregate supply can cause cost-push inflation. Prior to World War II, both inflation and deflation were common, ..
Discuss. “The internationalization of banking has weakened national safeguards against banking collapse, but at the same time it has made the need for effective safeguards more urgent.”
Suppose the income elasticity of demand for pre-recorded music compact disks is +4 and the income elasticity of demand for a cabinet maker's work is +0.4. Compare the impact on pre-recorded music compact disks and the cabinet maker's work of a recess..
You are going to display what happens in the long run in perfectly competitive markets when firms are operating at a loss. Demonstrate the shift that will occur in the market in the long run if all firms in this market are operating at a loss. Identi..
Identify a trend, technology, or entertainment mode or design that is likely to alter the way in which a business is conducted in the future and which of the seven dimensions of the general environment will this affect?
Dallas-based southwest airlines recently announced a 10-year contract that gives pilots a greater opportunity to share in the profits of the airline.
From the e-Activity, determine the environmental variable most likely to affect the short-run production over the next 12 months. Determine what managers can do to prepare for the possible change in short-run production.
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