Reference no: EM13891926
1. The classical economists believed that our economy was always at full employment or tending toward full employment. If our economy were operating below full employment, what would happen, according to the classical, to move the economy back toward full employment?
2. When the price level increases, the quantity of goods and services purchased declines. Why does this happen?
3. Explain the difference between the long-run aggregate supply curve and the short-run aggregate supply curve.
4. What were the major areas of disagreement between John Maynard Keynes and the classical economists?
5. Describe the chain reaction that is set off when (a) aggregate demand exceeds aggregate supply; (b) aggregate supply exceeds aggregate demand.
6. If you lived in a village cut off from the rest of the world, show how Say's law would apply to your village's economy.
7. Describe the differences between an inflationary gap and a recessionary gap.
8. Explain why large deficits are so bad.
|
Economies of scale more important
: Answer the same questions as in the previous problem if TC = .5m + 10Q. In which problem are economies of scale more important? Explain how this affects your outsourcing decision.
|
|
Make components according to the cost function
: An outside firm can make components according to the cost function TC=1m + 10Q. Suppose it typically produces 10m units. What is this firm’s cost per unit? Suppose that your firm is able to buy components at this cost per unit. If you order 1m units ..
|
|
Is vertical integration into pig farming needed to maintain
: Large producers of ham and pork food products require a steady supply of pigs over a long period of time to operate efficiently. Is vertical integration into pig farming needed to maintain that steady supply?
|
|
Long-run total cost function for firm producing skateboard
: The long-run total cost function for a firm producing skateboards is. Calculate the marginal cost function. What is marginal cost at the output level in part b?
|
|
Long-run and short-run aggregate supply curve
: The classical economists believed that our economy was always at full employment or tending toward full employment. If our economy were operating below full employment, what would happen, according to the classical, to move the economy back toward fu..
|
|
Calculate the short-run average cost function
: A firm has a production function given by q=2 sqrt(KL) In the short run, the firm’s amount of capital equipment is fixed at K=100. The rental rate for K is v=$1, and the wage rate for L is w=$4. Find the firm’s short-run total cost function (STC). Ca..
|
|
What degree is the public debt burden to future generations
: To what degree is the public debt a burden to future generations? Suppose income taxes and unemployment compensation were cut by an equal amount. How would aggregate demand be affected? As late as 1992, we were running budget deficits of nearly $300 ..
|
|
An agricultural firm has production function-cost to produce
: An agricultural firm has a production function (products of the whole year) given by q=500sqty(SF) q is output of agricultural products in pounds. S is land area in square feet. F is number of farmers working. Find the best way to produce 5000 pounds..
|
|
Manufacturers mark-up necessarily represent profit
: Electrotech, a maker of household smoke detectors, buys resistors for its smoke alarms for $.15 each. The resistor manufacturer marks-up the resistors from $.10. Does the resistor manufacturer’s mark-up necessarily represent profit?
|