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What are the external effects ( externalities ) and why they can lead to inefficiencies and government intervention in the markets . Why are some government policies to manage external effects effective ( efficient ) while others are inefficient ( inefficient ).
Suppose that a firm’s production function is Q = min{K, L}. Currently, the wage is w = 8 and the cost of capital is r = 8. What is the minimum cost method of producing Q = 40 units of output? Suppose that wages fall to w = 4. Keeping total cost the s..
Suppose the Federal Reserve is following the Taylor rule, which takes both inflation and business cycles into account when setting the fedeal funds rate. Also suppose that the inflation rate in the economy is equal to 3 percent and the output gap is ..
q.given the following annual information about a hypothetical country answer questions a through d.billions of
If the real money demand is greater than the real money supply, interest rates must rise to reach equilibrium in the money market as institutions sell bonds to obtain more money. The federal government’s control of the money supply, which influences ..
illustrate the effect of capital information by comparing the prodution possibitity curves, at the present time and ten years in the future, for two economie, one with a high and the other with a low rate of capital formation.
q.suppose that we modify the solow growth model by allowing long-run technological progress. that is suppose that z 1
The current price floor in the agricultural lettuce market is $1 per head. The price floor makes it such that the price of lettuce is 25% higher than equilibrium price and 100 heads of lettuce are demanded at the price of $1. Assuming that the elasti..
Progressive Insurance's 'Tripsense' monitors driving patterns of the people who purchase the related insurance policy. This lowers insurance costs because
What makes it conceivable for a country to experience constant debt to GDP ratio and at the same time experience continual government budget deficits is: Government budget surplus or deficit is: A rise in the government budget deficit will have a :
The owner's of a small manufacturing concern have hired a manager to run the company with the expectation that he will buy the company after 5 years. Compensation of the new vice president is a flat salary pluss 75% of the first $150,000 profit, then..
When we look at different economic policies we see that Keynesian, monetarist and supply-side economics advocate for restraining inflation and reducing unemployment?
The U.S. market for hand sanitizer is controlled by a monopoly (firm I, for incumbent) that has a total cost given by TC(qi) = 0.025qi^2. The market demand for hand sanitizer is given by P = 50 – 0.1Q. What are the incumbent’s profits if it commits t..
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