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The cross elasticity between two goods has been measured at -1.2. How are the goods related? Explain. Give an example of goods for which this might be a reasonable measure of cross elasticity. Using a S & D model for each of the two goods in the example you gave, show how the change in the price of one good (an increase in Supply changes the price of the first good), will affect the market for the related good or second good.
A competitive firm uses two variable factors to produce its output, with the production function y = min{x1/2, x2}. The price of factor 1 is $4 and the price of factor 2 is $5. Due to a lack of warehouse space, the company cannot use more than 20 uni..
Everything else remaining unchanged, what will happen if the Fed buys government bonds in the open market and borrowed reserves is zero?
1) Write program to ask how many Squirrels are in the backyard;
A monopolist operates at the minimum point of her ATC curve
Develop a 3 to 5 page double-spaced paper that advocates a position on this issue. Title page, appendices and bibliography are not to be counted in the page total for the narrative portion of the paper. Your paper should begin with a concise summa..
The year 2014 closed with the unemployment rate just below 6 percent, real GDP growing at roughly 2.5 percent, inflation below 2 percent, and the federal budget showing a deficit under 3 percent of GDP. Which arguments do you find more persuasive?
Cindy and Dan share a public good G. Cindy’s preferences are Uc = xc + 2G1/2, and she has income mc. Dan has preferences Ud = xd + 8G1/2, and he has income md. Both x and G have a price of 1. What is the Pareto efficient level of G? Instead Cindy wou..
Consider the independent private value auction setting that we talked about and solved in class. Assume that there are a total of n bidders (including yourself). The valuations are uniformly distributed [0,1]. Assuming that everyone else plays the pr..
An insurance market may fail to exist due to asymmetric information and adverse selection that results from it. Suppose that state law prevents car buyers from taking the offered car for independent quality verification for fear of discrimination tow..
How do you know you are at a point of diminishing returns when studying? Can anyone use tell their variable and fixed costs?
you borrow 10,000 pesos, you earn income in dollars, the dollar depreciates against the peso, you must pay back the loan in pesos. you borrow $10,000, you earn income in pesos, the dollar depreciates against the peso, you must pay back the loan in do..
Employees in a factory arrive at the tool crib at an average rate of one employee every five minutes. There are two tool crib taking and employee's orders. The average time for a tool room clerk to fill an employee's request is six minutes. The cost ..
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