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Flossy has a quasi-linear utility function, 16q1^0.5 + q2. The price of good 1 is fixed at one. Thus, Flossy's budget constraint is q1 + p2q2 =Y, where Y denotes income. 6.1 Compute the interior solution. 6.2 Compute the interior solution where q1 > 0 and q2 = 0. 6.3 Under what conditions on prices and income is the corner solution obtained?
A monopolist faces the following demand function for its product: Q = 45 - 5P The fixed costs of the monopolist are $12 and the variable costs are $5 per unit. a) What are the pro
Four different measures of GDP Using circular flow model we see that there are 4 equivalent ways of measuring GDP: Using the definition: market value of all finished goo
Q. Explain the problem with IS-LM model? The starting point of AS-AD model is an assumption in IS-LM model (and in the cross model) that limits its usefulness. This is an assum
Suppose gasoline and hybrid vehicles are substitutes. Draw a graph indicating what will happen in the market for hybrid vehicles if the price of gasoline increases. Be sure to labe
When investment banks underwrite IPOs, they are typically sell stock for 5-10 percent more than they pay for it. When they underwrite stock for companies that are already public, t
what is static and dynamic multiplier in keynesian theory?
Suppose the demand for guitars in State College is given by Qd = 9000 - 12P where Qd is the quantity demanded, and P is the price of guitars. Also, suppose the supply of guitars is
WHO IS JOHN MANYARD KEYNES
MEC vs MEI in detail
Q. Define Nominal wages? The nominal wage is wage per unit of time in the currency used in the country- what we usually just call wage. When we mention wage in macroeconomics w
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