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Suppose that the market for sweaters is perfectly competitive. The graph below shows the cost curves of a typical manufacturer in the market. Use the blue rectangle (circle symbols) to shade the profit that the manufacturer makes at a market price of $16.
If the term premium is equal to half a percent times the number of years to maturity of a bond for times to maturity of two, three, and four years, what are the interest rates today on a two year bond, a three year bond, and a four year bond.
Based on the newspaper government spending in the US is expected to rise through $30 billion next year. One of the senators of your state is touting how this increase in spending will lead to an rise in employment and aggregate output.
Suppose the price of food increases from Px1to Px2. On a clearly labelled graph, illustrate the income and substitution effects of the price change on the consumption of food.
Work out the effects of the following changes on 1. International price of bananas 2. Output of both goods in both countries.(Show the changes in world relative supply and demand curves and the PPF of each country).
It is a study guide which will help students to further research the topic.
Describe the Diamond-Water paradox and the solution. Explain why price is greater than marginal revenue for a single-price monopolist and how this differs from perfect competition.
Suppose that the officials in Ecoland have compiled the following data about their economy for last year:
Ten competitive saw mills currently supply lumber to a market whose demand q, depends on lumber price, p, as follows,
Caviar and champagne are complements. Recently, pollution has been a problem in the Volga River, where much of the world's caviar originates. The sturgeon that live in these waters are laying fewer eggs than before. Show graphically and explain..
In a 2009 Newsweek article, The 50 Most Powerful People List, there are 3 bankers who are listed as the 4th, 5th, and 6th most powerful people in the world. Read the following article on the "Economic Triumvirate": Downloadable pdf version: The Glo..
Elucidate why the general level of wages in high in the United States and other industrially advanced countries.
In a closed economy, marginal propensity to consume .6. If the economy opens up to world and marginal propensity to import is .4, using the Keynesian model of output determination;
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