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a) Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity, price) points of (100, $20) and (300, $10). (b) Calculate the cross-price elasticity of demand coefficient of a firm's product X, given that a 5% increase in the price of its close substitute, product Y, causes the quantity demand of product X to increase by 10%. c) Calculate the income-elasticity of demand coefficient for a product for which a 4% increase in consumers' income will increase the quantity demanded by 6%.
You have 300 right now. You invest into an account and 12 years later your investment will be 8 times of the initial investment. What the investment rate if a) The bank pays sim
What are the important tools to consider Monetary Policy? Important tools to consider Monetary Policy: a. What the money demand curve is b. Why the liquidity preference m
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
Q. Determination of variables in AS-AD model? Once Y and P are determined, all other endogenous variables would be determined as well. Interest rate is determined by money mark
explain the terms abnormal profits and normal profits
Component of balance payment: BOP is a statement that summarises all the economic transactions between residents (individuals, companies and other organisations) of the home
comparison between neoclassical factor endowment theory of international trade and classical labor cost theory of comparative advantage
1. Given the following production function: Y = K1/4 L3/4 Find the following: a. Per worker production function. b. Steady-state capital-labor ratio as a function of d and
Q. Show the Changes in the exchange rate? Assume that United States is our home country and the current euro exchange rate in direct notation is SD = 1.5 (euro/USD). In indirec
Sally's Silk Screning produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event its
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