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Suppose that the price of beer rose by 2.2%, the price of pizza rose by 5.3% and the price of chocolate did not rise at all. Also, suppose that beer preresents 22 percent of the economy and pizza represent 4 percent. Chocolate is the rest of the economy. What was the inflation rate for this economy?
Illustrate what happens to output and the optimal scale of a firm, and price if there is a free entry into the market.
Using two-part pricing , what will be the entry (membership) fee? What will be the per-unit fee? Compute the profit earned from a typical consumer with two-part pricing. Hint: same as perfect price discrimination profit.
If the farmer rented her land from a landowner,would she have the same incentives to control soil erosion. What would the landowner have an incentive to control erosion.
Describe why it is often asserted that that exporters suffer when their home currencies appreciate in real terms against foreign currencies and prosper when their home currencies depreciate in real terms.
Assume stock returns can be explained through the following three factor model:
Illustrate what is the capital account balance. Illustrate what is the financial account balance.
These three empirical observations are explained by ‘Preferred Habitat theory'. First, completely explain Preferred Habitat theory. Next, explain how this theory explains all three empirical observations.
Will market of demand and supply for labour with no government interference lead to an efficient outcome? Will your program affect it? Why or why not. How well do you think a voluntary contribution scheme [paid for by companies] would work in fun..
Elucidate how would you argue your case, both in terms of opportunities also necessary local adaptations to successfully enter the region or further develop your presence.
For a competitive firm facing a market price above average total cost, the existence of economic profits means that the firm should increase output in the short run even if price is below marginal cost.
You recently hired an economist to work with engineering also operations experts to estimate the production function for a particular line of office chairs.
Solve for aggregate expenditures (AE) as a function of Y, and compute the equilibrium level of national income. Elucidate your equilibrium in a diagram with AE.
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