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Fiona requires a minimum level of consumption, a threshold, to derive additional utility: U(X,Z) is 0 if X + Z ≤ 5 and is X + Z otherwise. Draw Fiona’s indifference curves. Which of our preference assumptions does this example violate?
Bill is thinking of investing in a Silicon Valley start-up. His von Neumann-Morgenstern utility-of money function is U(w) = 9+w-(w^2/100) where w denotes wealth measured in thousands of dollars (thus w = 1 means $1,000). Would a risk-neutral person m..
Countries A and B are exactly similar in terms of resources and technology. Still country A reported a higher growth rate than country B last year. Which of the following can explain this anomaly? I. higher population growth in country B II. favorabl..
Define and explain ‘Law of Diminishing Returns with the help of diagram. What are the different stages of production in the short run? Define and explain ‘Price Discrimination (PD)’ with the help of diagram. Also give examples of Price Discrimination..
Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVR..
With the aid of supply and demand diagrams, explain how and why each of the following is likely to affect the price and quantity in the market for Compact Discs (CDs). A technical break-through reduces the cost of producing CDs.
Maria decides to switch a major and is now a student in business. in period 2, she will have a BA in business and her income will be $88000. determine Maria's lifetime wealth. determine consumption and sacving of maria in period 1 and period 2.
The political independence of central banks is an increasingly important issue in the global economy. What is the global trend in the political independence of central banks? Is this good or bad for the global economy? Explain with examples.
Which economic decision makers determine the demand for labor. What are their goals. Illustrate the decision criteria do they use to reach their goals.
If the firm has a monopoly in product A and product B is sold in a competitive market, then what is the profit-maximizing tie-in sale price of product A?
Systems to predict food shortages also need reviewing: early warning systems are of limited use without an effective response from policymakers. How will CAADP work when or initiatives have failed in past.
Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350. Prepare a post-closing trial balance.
Also explain and illustrate how the terms of trade determine the extent to which each country specializes and then finally explain and illustrate the mutual benefits of trade.
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