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Suppose you decided to open a copy store. You rent store (signing a one year lease),and you take out a loan at the local bank and use the money to purchase 10 copiers. Six month later a large chain opens a copy store two blocks away from yours. As a result, the revenue you receive from your copy store, while sufficient to cover the wages of your employees and the cost of paper and utilities, does not cover all of your rent and the interest rate and repayment costs on the loan you took out to purchase the copiers. Should you continue operating your business?
Demand Pull Inflation: Suppose that the central bank wants to increase output, but the economy is already at the natural rate. Show the short and long run effects of a monetary expansion in this situation in the AD/AS model. You can omit the labor ma..
The main reason firms may exit a market is because of:
Explain how are money cost and opportunity cost related to each other. If markets function well, they are closely related. They are always identical in any economic system.
Suppose an airline is losing money because they cannot fill enough seats in their flights with passengers. The airline would offer a flight only if at least 70% of the seats could be filled. The average total cost for the typical flight is $12,600. W..
What is the amount of 10 equal deposits that can provide five annual withdrawals, where a first withdrawal of $2,000 is made at the end of year 11 and subsequent withdrawals increase at the rate of $500 per year, if the interest rate is 10% compou..
In developing a vaccine for the SARS virus a pharmaceutical company incurs a very high fixed cost. The marginal cost of delivering the vaccine to patients, however, is negligible (consider it to be equal to zero).
Illustrate what is the equilibrium price and quantity of hotel rooms on Manhattan Island.
q1. difference between deflation and disinflation? what is bad about deflation? can you distinguish between anticipated
There is an asset demand for money because households and business firms use money as a store of value. What are some other reasons that households and business firms hold money?
Gene has the following utility function: U = XY + 2Y, the Px = $4, the Py = $1 and I=$6. What is the slope of the budget constraint? At the optimal X* and Y* calculate and interpret the MUx/Px & MUy/Py.
Depends on the evidence in this article and what you know about the economy in the United States, decide which of these statements is most likely to be true.
According to the political business cycle theory, if the Fed wanted to see a President re-elected, prior to the election it might
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