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For most normal goods the income effect and the substitution effect work in the same direction; so when the price of a good falls,both the income and substitute effects lead to a higher quantity demanded. how would this change if the good is an inferior good?
calculate the change in welfare compared to the free market outcome (i.e., in the absence of minimum wages). Is this a welfare gain or a loss?
Which of the following can be thought of as an adjustment for the risks involved with respect to the cost of a firm acquiring financial capital? If a firm is producing so that the point chosen along the production possibility frontier is socially pre..
Suppose that the demand curve for seats at the denver minor league baseball stadium is given as Qd = 6,000 – 200p. How many fans would attend a game if tickets were free and there was no limit on the number of fans permitted in the stadium?
Explain the main channels (not the Fed’s tools: omo, rr, dr) through which the Fed can influence economic activity. Specifically explain the ways that Fed policy can influence consumption, investment, net exports, GDP, inflation and unemployment.
Why do points on a utility possibility curve represent efficient allocations of resources? Why must the utility possibility curve be downward sloping
Tom gains utility from consumption C and leisure L. The most leisure she can consume in any given week is 112 hours. His wage is $20. His utility function is U(C,L) = C^3/4*L^1/4. Tom receives 640 each week from her great-grandmother. What is the mar..
Super Tennis Co is in the business of designing and manufacturing running shoes for long distance runners. They are considering a $500 million upgrade to their production line for the iPhone/iPad/ iWatch connected shoe that has Bluetooth connectivity..
There are, on average, 150 new migrants entering Hong Kong from the mainland every day. Use a diagram to explain how this affects the equilibrium wage and quantity of labour in Hong Kong. Substantial foreign capital has been flowing into mainland Chi..
Using this forward curve, what is the present value today of $1,000 received at the end of year 10? What is the semi-annually compounded spot rate to year 10? Use this forward curve as the Libor reference rate to calculate the discount margin of this..
The revenues and costs of The Greener Way, a lawn care business wholly owned by Mr. Albert Johnston are listed below. Lawn Mowing $63,000 Aeration $2,000 Labour Cost $30,000 Vehicle Costs $15,000 Lawnmower Maintenance $5,000 Debt-Service Costs $13,00..
Which of the following items used to produce a product is a capital item?
The mean number of mall stores visited by a customer is 4.9 and the variance is 1.9. A new promotion increases the number of stores visited by 2. Calculate the variance of the number of stores visited with the promotion? Use the laws of expected valu..
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