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1. If I told you that GDP was forecast to rise by a bit more than 3% over the next year, what would that mean to you? What should you be asking about the forecast?
2. Can you think of ways in which inflation may be a positive vs. a negative?
Consolidated Drugs, Inc. has spent $4 million developing and testing a new anti-aging drug. Management now estimates that it will cost $2 million to produce and market this new product.
Use the data below to find out the growth of income per person (over the entire period, not an annual basis) between the two years listed.
The price per unit remains $7.50 in both scenarios. Does the labour analyst's argument hold? Explain why or why not, and use data to prove your point. (Hint: calculate total costs in both circumstances).
If the price of manufactured goods rises to $6 bushel (a rise of 50%), the parity price of corn as well rises by 50% - to $4.50 in this hypothetical example.
Assume that the nominal wage rate equals 60. In the short-run, aggregate demand and aggregate supply are equal at a price level of 1.0.
Suppose that because of the ongoing financial turmoil banks become more prudent: that is, other things equal, banks want to hold more excess reserves and make fewer loans.
What is the share of Household A's income spent on education? Does this household consume more or less education if EF = 20 is provided by the government? What is the share of Household B's income spent on education?
Assume that the soft coal industry is a competitive industry and it is in long run equilibrium. Now assume that the firms in the industry form a cartel.
In a perfect capital market, advices for a corporate financial manager on making capital structure decisions.
Discuss how a change in price affects total expenditure by filling in each cell with resulting change in total expenditure.
Give at least three explanations of why economic reasoning would argue that this is to be expected.
Suppose you are reviewing an isocost graph. The axis on the graph shows capital units on the vertical axis, and labor units on the horizontal axis.
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