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Problem
1. You read in a newspaper that the owners of capital in a particular country are urging their government to restrict trade through import quotas. What might you infer about the relative factor abundance in that country? Why?
2. It has been argued that opening a country to international trade is a great "antitrust" policy. What impact would the threat of imports have on a monopolist who had never before been faced with foreign competition? How would the monopolist respond concerning the quantity produced and the price charged in the domestic market?
A producer in a perfectly competitive industry has a cost function described by TC(q)=1000+6q+0.2q^2. If the market price is 40 and it has already committed to paying the fixed cost, what is the maximum profit for the producer?
Explain what actions you would recommend to the key players and/or policy holders. Explain how the above analysis supports your conclusion
Q1. Joan's utility depends on two commodities: her view of the sea and wine. Her utility function is:
a the rising stock market implies an increase in wealth at least as measured on paper. if we assume that some of this
Explain how lower persistence of productivity shock affects the impulse responses and the second moments and persistence of macro variables
Discuss the Aggregate Demand and Supply. When oil prices drop, who benefits and who loses? Why? How?
If the demand for money depends positively on real income and depends inversely on nominal interest rate, determine what would happen to the price level today if the central bank declares.
What type of stabilizing fiscal policies arise because tax revenues and outlays fluctuate with the real GDP
What is the best way to deal with "Free Riders?" Comment on at least 2 areas where Freedom Riders are a problem.
How could the organization create more value for its stakeholders? What should the organization do to prepare for the future flow(s)?
1) List the components of GDP in the output (expenditures) approach and in the income approach.
a) Compute the impact of the gasoline price increase on the demand for cars. b) Compute the price elasticity of demand for cars during this period.
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