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The U.K. Body Shop franchise network consists of three types of stores—franchised, company-owned, and partnership stores. All stores that are distant from headquarters by more than 300 miles are franchised. More than half of the company-owned stores are within 100 miles of headquarters.44 How can you explain these facts?
Adam Smith favors a policy of laissez faire in managing economic activities. Why? Economics deals with the efficient use of resources? Why? Marginal analysis tends to produce more optimal outcomes when working with scarce resources. How?
The production possibilities curve shows the:
If the quantity demanded of a good falls by 2% when income rises by 10%, then:
If the fed decides to use discount policy to increase the money supply what will it do? Be specific about who within the federal reserve system makes the decision, and who else is involved in the process.
The United States has become a net debtor nation where the rest of the world owns more assets in the United States than the United States owns assets in the rest of the world. The United States external debt is directly caused by: Years of households..
Gas prices fluctuate often and in both directions. How responsive do you think consumers will be to the price change when these fluctuations occur due to changes in supply? Why? Use the various determinants of elasticity to explain your answer. How d..
What lump sum of money (P) must be deposited into a bank account at the present time so that $500/month (A) can be withdrawn for five years (N), with the first withdrawal scheduled 6 years from today at a nominal interest rate (r) of 9% per year? [Hi..
If the Fed buys government securities, then there is
Describe fully with many paragraphs in an essay style, the economic arguments for and against a free market approach to allocating scarce resources. Provide a unique real world (come up with them on your own) example where the free market defiantly a..
Because a steep demand curve indicates prices can increase quickly when the quantity demanded rises only a little bit, steep demand curves represent goods that are very elastic. When price controls are implemented, one group wins at the expense of th..
In an application of the Harrod-Domar model, suppose the only final-goods industry in a country is the making of cotton shirts. The factories, machinery and warehouses used in production were purchased previously and are still worth $3 billion. What ..
Suppose you are the owner of a firm. You’ve optimized and determined that the cost function is as follows: C(Y) = 3000 + 0.5Y^2 - 20Y. What are the operating (variable) costs? At which quantity are operating (variable) costs minimized? At which qua..
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