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Critical Thinking: The price of transplantable human organs has increased significantly in recent years. Why do you think that has occurred? Organ transplants are expensive. The hospital and medical personnel earn lots of money and the recipient pays lots of money. No money, however, goes to the donor or his or her family. Do you think it would change the supply of organs if donors or donor's families were paid?
Would the following events usually lead to capital deepening, or not? Explain briefly.
Results of drilling are 15 dry holes, 12 gas producers, 18 oil wells, and 20 wells producing both oil and gas.
Assume that b=1 and that initially the real interest rate is equal to the marginal product of capital at 4%. As well, assume that v=1/2 and that the inflation rate last period was 2%. If the housing bubble busting causes the share of output of invest..
If a bank has deposits totaling $200,000, and their reserve requirement is 10%, what is the total on their required reserves? If that bank had total reserves equaling $50,000, what are their excess reserves? What will banks likely do with their exces..
If income rises from 1000 to 1800 and consumption rises from 1100 to 1700 the marginal propensity to save.
Identify the point on the budget constraint this worker has chosen. Explain how much is he working per day.
Kathy's Bakery is a local full-service bakery in Omaha, Nebraska. Kathy sells loaves of wheat bread for $3 a loaf. Of this amount, $1.50 is profit contribution. Assuming average variable costs are constant at all output levels, what is Kathy's total ..
A commercial bank has no excess reserves until a depositor places $5000 in cash at the bank. The commercial bank then lends $4000 to a borrower. As a consequence of these transactions the size of the money supply has
Suppose that the Fed has decided that it should have an activist monetary policy in order to stabilize the level of GDP by managing the money supply. When the following events occur, show whether the Fed’s policy will actually stabilize GDP or not:
Next, suppose that the government establishes a price floor of $4.60 for wheat. What will be the main effects of this price floor? Demonstrate your answer graphically.
When an economy is under autarky the price of eggplant is $5. The world price of eggplant is $3.50. If opened to the world market, would consumers or producers benefit? Would consumers or producers lose? Explain your reasoning (using a graph would be..
Suppose the US dollar depreciates against other currencies. Under the linked exchange rate system, Hong Kong pegs its nominal exchange rate to the US dollar. What would happen to the prices of goods and services (in terms of US dollars)in Hong Kong i..
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