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Gasoline, insurance, depreciation, and repairs are all costs of owning a car. Which of these can be considered opportunity costs in the context of each of the following decisions? a. You own a car and are deciding whether to drive 100 miles for a weekend visit to a friend at another university. b. You do not own a car but are considering buying one so that you can get a part-time job located 5 miles from where you live. In general, why does the context in which you decide to do something affect the opportunity cost of doing it?
Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0
A small country can import a good at a world price of 10 per unit. The domestic supply curve of the good is S = 20 + 10P The demand curve is D = 400 – 5P In addition, each unit of
Relationship between the interest rate and the bond price Note that the higher the issue price, the lower the interest rate. Similarly when the price of a government bond incr
Q. Aggregate supply in AS-AD model? In order to figure out all the variables in AS-AD model, we need one more equilibrium condition so that we can identify a unique point on AD
The Pigou effect: A) suggests that as prices fall and real money balances rise, consumers should feel less wealthy and spend less. B) suggests that as prices fall and real mo
Describe how price level evolves over time Using the time series we can study how price level evolves over time. If all prices rose by 2% during one month, price level would ri
Foreign exchange risk is the level of uncertainty that a company must handle for changes in foreign exchange rates that will unfavourably affect the money the company receives for
what is the impact of interest rate in consumption
Consider an economy in which George and Harriet consume only ale and bread. George's utility function is UG = aG(bG- 1) where aG and bG are his consumption of ale and bread. Harrie
Singer suggests that although the right to sell blood does not threaten the formal right to give blood, it is incompatible with "the right to give blood, which cannot be bought, wh
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