Two deficits are related economically

Assignment Help Business Economics

Reference no: EM138938

Q1. People sometimes talk about ‘twin deficit' where the twins are the current account and the government budget deficit. Carefully explain how these two deficits are related economically so that changes in one are reflected in changes in the other.

Q2. "McDonald's has a monopoly for selling Big Macs in both the U.S. and China. In the U.S. the elasticity of demand is -3. In China, the elasticity of demand is -4. The marginal cost of a Big Mac is $2. Resales are not possible. What price is charged in each country?"

Reference no: EM138938

Questions Cloud

Write the t statistic for testing the null hypothesis : Explain why this model violates the assumption of no perfect collinearity. Write the t statistic for testing the null hypothesis

Operationalize sustainability : This is designed to analyze an organization and to help develop a plan for that organization to better Operationalize sustainability in the future. This is the paper you will keep as part of your MBA Portfolio which you could show to current or futur..

Use the best-response approach to find all nash equilibria : Player 1 has the following set of strategies {A1;A2;A3;A4}; player 2’s set of strategies are {B1;B2;B3;B4}. Use the best-response approach to find all Nash equilibria.

Perfectly competitive case : What will the equilibrium be. How do producer and consumer surplus change from the perfectly competitive case.

Two deficits are related economically : Carefully explain how these two deficits are related economically so that changes in one are reflected in changes in the other.

Results in the social optimum : What is the social optimum? What specific tax per unit of output of gunk results in the social optimum.

Output rate to maximize its profits : If each of the firms sets its own output rate to maximize its profits, assuming that the other firm holds its rate of output constant.

Goods that this person buys and that bread is free : Suppose also that ham and cheese are the only goods that this person buys and that bread is free.

Same premium based in the average risk : Suppose one insurance company decided to charge teenagers and adults the same premium based in the average risk of an accident among both groups.

User Account

All Pages