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Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in reponse to each of the following changes? Production function is Y=AK^1/3L^2/3.
a. Investment rate doubles
b. depreciation rate falls by 10%
c. Productivity level rises by 10%
d. Earthquake destrys 75% of the capital stock
e. Generous immigration policy lead the population to double.
Array Solutions requires a 14 percent return on their projects. Analysis shows that even though they have been earning the desired 14 percent, their real return appears to be only 10 percent when they look at what they can buy with their returns. Exp..
Explain the liberal perspective on markets and the state with specific reference to the Keynes/Hayek debate. Why are the differences between them vital for understanding contemporary international political economy?
Steve’s preferences for hamburgers (X) and chicken sandwiches (Y) can be represented by u(X,Y)=X 0.5Y 0.5. Graphically decompose the total effect of the price change into an income effect and substitution effect. Plot hamburger consumption on the hor..
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Excise tax is levied on the buyers of a good, then after the tax buyers will pay for each unit of the good.
There were 110,752 discharges in 2005, for patients over the age of 25 who were diagnosed with Diabetes. With an average length of stay being 4 days and an in-hospital death count of 1,016. In 2006 the total number of discharges increased to 118,837 ..
Please analyze a current events article that deals with a highly competitive industry such as online advertising. Your analysis should include the factors driving change in the industry. Decide if there are potential changes due to globalization or t..
Use the following FOC for schooling in the simplified model: f'(s) = r(f(s)+c(s)), in which s is total time in school (e.g., years of school attained), f(s) is the adult wage while working, and c(s) is the direct cost of school (tuition, transportati..
A firm plans to produce 1,000 units per day of good X. The firm’s production engineer finds two technically efficient processes (i.e., input combinations of labor and capital) to produce 1,000 units per day: If the firm must pay $200 per day for a un..
What role does economics play in the political realm? Why do we care what type of market China and Russia have? Can any of you provide an example of how this influences your daily life?
Explain how the following events affect output, capital and consumption per unit of labor in the long run and along the transition according to Solow's Model: The destruction of 30% of the capital stock because of a natural disaster. A permanent incr..
Illustrate what is the interest rate. Jack and Jill both obey the two-period fisher model of consumption.
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