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Assume that the u.s. has 400 units of K (capital) and 300 units of L (labor) while Mexico has 75 whits of K and 125 units of L. In both countries it takes 3K/L to produce each unit of X but only 2K/L to produce each unit of Y. Which nation has the comparative advantage in exporting X?
Class, Hurricane Katrina's effect on the Gulf Coast was tragic for that area and for the entire United States of America. Many lives were lost and the true cost to society of the loss of human lives is immeasurable. The cost to the economy, however, ..
Suppose you have three indivisible assets, A, B and C with internal rates of return 2%, 5% and 10% respectively and initial costs of $1, $4, $5. Suppose you have $6.5 at 1% and can borrow at 8%. What is the incremental cost of funds on asset B?
With the help of an example discuss the characteristics of globalization. What are the factors that contribute to the attractiveness of a country as a market or investment site? What are the implications of cultural differences for international busi..
Analyze the roles of physical capital, human capital, technology, and natural resources in influencing long-run economic growth of aggregate output per capita, and how governments can contribute, or discourage long run growth through their policie..
Plot graphically the demand and MR curves for each market, and also show GGC's combined marginal revenue curve (?MR) and its MC curve. Show graphically the quantities that should be produced and sold, and the prices that should be charged, in each..
Government spending is often too small to have the impact that governments usually want to see on the economy. However, something occurs in the economy after the initial government injection which makes the end result much larger.
allows foreign customers to purchase them by mail for price v2 where v1, v2 are the domestic and foreign reservation prices The problem is that frequent travelers are tempted to purchase the CD players domestically, then sell them overseas. Assume..
Compute the price elasticity of demand using the point formula for Px = 20 and Py = 10. Determine whether demand is elastic, inelastic, or unit elastic with respect to its own price and whether Good Y is a substitute or a complement with respect t..
In each of the following cases, either a recessionary orinflationary gap exists. Assume that the aggregate supply curve ishorizontal so that the change in real GDP arising from a shift ofthe aggregate demand curve equals the size
Use the Phillips Curve to describe the tradeoffs between inflation and the unemployment rate, both in the short-run and in the long-run.
What are the monopolist's profit-maximizing output and price and what is the resulting deadweight loss relative to the competitive outcome?
A firm that sells e-books books in digital form downloadable from the Internet sells all e-books relating to do-it-yourself topics (home plumbing, gardening, and so on) at the same price. At present, the company can earn a maximum annual profit of..
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