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1. Explain why it would generally not be considered wise economic policy for a government to attempt to achieve a balanced budget every year.
2. Iron ore is Australia's largest export. Suppose that there was an unexpected increase in demand for Australia's iron ore exports globally. Explain what this would do to Australian Dollar exchange rates, and how this would impact other exporting industries, other import-competing industries, and domestic consumers.
Describe how a change in the exchange rate affected your firm. Explain what happened to your price and quantity.
If labor productivity grew at the rate of 1.4% per year Illustrate what would average hourly compensation be in the year.
A negative income elasticity of demand coefficient indicates that:
What is the appropriate cost of capital to evaluate the? business?
Sometimes market activities (production, buying, and selling) have unintended positive or negative effects outside the market's scope. These are called externalities. As a policy maker concerned with correcting the effects of gases
A stock is expected to pay a dividend of 0.50 in one quarter, and stock's expected price in one quarter is 15.00. The equity cost of capital is 6 percent per
Public subsidies for new stadiums and arenas are commonly justified on the basis of economic benefits they will confer on the local economy rather than on public consumption externalities or on the value of an enhanced community image. In the article..
Most airline routes in the US, Europe, and increasingly worldwide, are intensely competitive, yet most are oligopolies. What model of oligopoly is consistent with the price competition typical of the airline industry? Explain
During the last few decades many new management tools have been introduced. What tools would be the most profitable for managers?
Using the ideas we discuss this week, we are able to make clear statements on when a firm should operate and when it should shut down. When is it sensible for a firm to shut-down? What actions might a firm take to stay in operation in the long-run? D..
A computer company’s cost function, which relates its average cost of production AC to its cumulative out- put in thousands of computers Q and its plant size in terms of thousands of computers produced per year q (within the production range of 10,00..
Suppose that the currency-to-deposit ratio is 40 percent and that the excess reserve ratio is 1 percent, whereas the required reserve ratio is 9 percent. Calculate the effect of an open market sale of $10m on the money supply (M), checkable deposits ..
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