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What does it mean for two goods to be "perfect substitutes" for each other for a consumer? Why is the optimal bundle usually a corner solution when a consumer is choosing a bundle of perfect substitutes?
Suppose the following equations discuss a hypothetical economy where both the price level and interest rates are fixed.
The manager of a corporate division faces possibility of an audit each year. She prefers to spend time preparing if she will be audited;
Explain how do you calculate the free market wage rate given the labor supply and demand functions.
If the price of 1 pound of cereals is $10 and the price of a sword is $100, what is the wage rate paid to Hobbits in the Shire? How many Hobbits work in the cereal sector? In sword sector? Because of the War of the Ring, the price of a sword went ..
Explain briefly how a change to the following MS, MD, or P would shift LM function to right. Include in your discussion whether the variable would have to increase or decrease to cause the rightward LM shift.
Sketch a graph of demand and supply curves that shows the effect of an increase in rainfall on the equilibrium price and quantity of corn. Do price and quantity increase or decrease?
If the indurtry can pay only one of the six salary levels shown, which should it choose? How many workers will it employ?
Suppose a monopolist with cost function C (Q) = 3Q selling to 2 segments of consumers where Q is total output produced by the monopolist in both markets. If the monopolist can use a single two-part tariff, compute the two part tariff that will maxim..
Make an analysis by answering questions below. Suppose that the Bank of Ecoville has the following balance sheet and the Fed has a 10% reserve requirement in place:
Suppose the price of widgets falls from $7 to $5 and consumption of widgets rises from 15 widgets a month to 25 widgets.calculate the price elasticity of demand of widgets.
This product, called Red Hat Linux, is a potential replacement for UNIX and other well-known operating systems. If you were in charge of pricing at Red Hat, what strategy would you pursue? Explain.
Draw a real expenditures curve on a graph showing a recessionary gap. Explain what happens to real GDP when it is initially to the right of the equilibrium point and why. Indicate two public policies that would be appropriate for addressing this s..
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