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Discuss the reason for the following, using elasticity of demand as the basis for your answer. Motivate your answer with the aid of examples
Narrowly defined markets tend to be associated with a more price elastic demand than broadly defined markets
Goods tend to have more price elastic demand over large time horizons.
Necessities tend to have relatively inelastic demands, whereas luxuries have relatively elastic demand.
A country has only two inputs K and L and produces two goods X & Y. It is endowed with 30 units of L and 15 units of K. Industry X is endowed with 25 units of L and 5 units of K and industry Y has the rest of L and K. This is an inefficient allocatio..
Discuss the difference between The Harrod-Domar model and the Solow growth model.
In its rivalry with Westinghouse, Gneral Electric instituted a "price protection" plan. This plan stated that if GE lowered its price, it would rebate the price difference to its past customers. Show that this plan makes collusion between GE and West..
Describe the advantages and disadvantages of free trade. (Consider specific examples of agreements such as the Trans-Pacific Partnership or TPP.)
Illustrate what would happen to total employment, the size of the labor force, and the unemployment rate? Show the results graphically.
The allocative efficiency loss implied by the diagram is a static, short-run loss. Compared to the static loss, the dynamic, long-run loss is probably: Evidence suggests that unions reduce firm profitability and discourage investment, so that: All of..
The total surplus (TS=PS+CS) under the old tax per unit was $2000. Next, government reduces the tax rate such that the total government revenue drops $200 below its previous value and DWL drops $100 below its previous value, what can be a possible ne..
A bond has a par value of $1,000, a current yield of 6.25 percent, and semiannual interest payments. The bond quote is 100.8. What is the amount of each coupon?
A consumer buys only two goods, x1 and x2. Initially, the prices are (p1; p2) = (4; 3) and the consumer chooses (x1; x2) = (3; 4). Later, the prices change to (
If possible, upload a picture of it as well. Then, make a suggestion as to how it might be improved. How would this improvement assist you?
According to the monetarist view,
You have $1000 to invest over an investment horizon of three years. The bond market offers various options. You can buy (a) a sequence of three one year bonds (b) a three year bond or (c) a two year bond followed by a one year bond. The current yield..
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