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A firm with two factories, one in Michigan and one in Texas, has decided that it should produce a total of 500 units to maximize profit. The firm is currently producing 200 units in the Michigan factory and 300 units in the Texas factory. At this allocation between plants, the last unit of output produced in Michigan added $5 to total cost, while the last unit of output produced in Texas added $3 to total cost. Is the firm maximizing profit? If the firm produces 201 units in Michigan and 299 in Texas, what will be the increase (decrease in the firm's total cost?
(Effects of Fiscal Policy) Recently some legislators have called for tax increases to reduce the federal budget deficit. Conservatives have countered that such tax increases could
SUppose nominal GDP increases from 5.8 trillion to 6 trillion. The GDP deflator rose over that same year by 3.9 percent. By what percent does the real output increase?
How does Opportunity cost and production possibilities relate?
a) Get the latest data for each of the following variables for France in 2011: 1. Nominal GDP 2. Real GDP (Y) 3. Consumption (C) 4. Investment (I) 5. Government purchases (G)
In 1999 Mercedes-Benz USA adopted a new pricing policy, which it called NFP (negotiation-free process), that sought to eliminate price negotiations between customers and new-car de
Q. Money market with inflation and rising money supply? Figure: The money market with inflation and rising money supply If we let π M refer the growth rate in money
Oil price shocks lead to large adverse supply shocks in the macroeconomy, infer Dornbusch et al (2008) who define an adverse supply shock as; ‘one that shifts the aggregate supply
If demand increases and the supply increases also, then what will happen to the new equilibrium price and equilibrium quantity? Explain what is happening with the curves and how pr
the suitability of utilising a policy of tariffs and quotas given the case of perfect competition.
If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price. A) the country will be an exporter of the good. B) the country
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