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Suppose that Michael and Dwight each have a $60 weekly entertainment budget. They pay the same prices for two goods, "an evening reading books" (an ERB) and "an evening of beer and bowling" (a BAB). The price of an ERB is $20, and the price of a BAB is also $20. Michael prefers an evening reading books (ERB), and Dwight prefers an evening of beer and bowling (BAB). Suppose ERBs is measured on the vertical axis and BAB is measured on the horizontal axis. a. What is the linear equation for the budget line? b. Draw Michael's indifference curve and Dwight's indifference curve on the diagram. Briefly describe how the diagram depicts their different tastes.
How credit is created or the creation of credit
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
A firm conducted a research about the demographics of their customers. For the study they collected data about the following variables: gender, marital status, credit rating (low,
The LM curve The LM curve shows all combinations of R and Y, where the money market is in equilibrium. The LM-curve slopes upwards. Mone
Q. AS-AD model with inflation? When we have inflation, both AD curve and AS curve will be gliding. 'The glide rate' of the AD curve is given by Π M whereas it is Π W that appli
Some charge that the Crisis of 2008 was caused by the "greed" of Wall Street firms and other bankers. Do you agree with this view? Do you think there was more greed on Wall Street
It is sometimes asked whether credit cards are money since many purchases are made using these. Credit cards are a means of obtaining credit and using this to finance expenditure,
how inflation trade off is not feasible under adaptive expectation
Q. Why GDP is determined only by aggregate demand? Note that we haven't said anything about the aggregate supply so far. In order to justify why GDP is determined only by aggre
explain the terms abnormal profits and normal profits
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