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Assume that the money demand function is (M/P) d = 2,200 - 200r, where r is the interest rate in percent. The money supply M is 2,000 and the price level P is2. If the price level
Suppose price elasticity of demand for HP laptops is -2.3. If the price of an HP laptop is $1,000, what should the new price be to have an increase of 10% in quantity demanded for
The Neoclassical thinking that assumes that all firms are established with the intention of making profit has been challenged by the managerial discretion models. How successful ha
explain the terms abnormal profits and normal profits
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
The director of admissions at Kinuza University in Nova Scotia estimated the distribution of student admissions for the fall semester on the basis of past experience. What is the e
If the indifference curves are straight lines with slope s, and the budget constraint is given by: x*p1+y*p2 = m, then describe the optimal choice of the consumer.
Suppose a major brokerage firm advised its clients to buy cigarette stocks under the assumption that, if consumer incomes rise by 50% as expected over the next decade, cigarette sa
Effects of consumption function.
Suppose you have the following information about a closed economy: C = 50 + 0.80 (Y-T) I = 200 G = 100 a) Find out the equilibrium level of income. b) Suppose G in
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