Describe the significance of supply and demand * To a Small business owner * To the executive management of a large bank * To state and federal legislators and elected leaders. How are supply and demand viewed differently fromt he macroeconomic viewpoint as opposed to the microeconomic viewpoint?
1. Macroeconomics can best be described as the: A. analysis of how a consumer tries to spend income. B. study of the large aggregates of the economy or the economy as a whole. C. analysis of how firms attempt to maximize their profits. D. study of how supply and demand determine prices in individual markets. 2. A recen
Given these demand and supply curves, Q = 70 2P Demand Q = 10 + P Supply Solve for equilibrium price and quantity. The demand curve shifts in to the left by 15 units. Solve for the new equilibrium price and quantity.
The following are labor Demand and labor supply curves for the economy, Nd= 250 - 2(W/P) Ns= 3(W/P) Calculate the equilibrium real wage rate and the equilibrium quantity of labor. (b) Suppose that the nominal wage rate equals 60. In the short-run, aggregate demand and aggregate supply are equal at a price level of 1.
SCENERIO : Buffaloes Bill the Taxpayer Back home on the range, a funny thing is happening to the beef cattle and buffalo businesses. A. The news for cattle ranchers is not good. · The national cattle herd has been in decline for the past twenty years. · Per capita consumption of beef is down 20 percent in the same period. · Producers' costs go up while beef prices go down. · Kids that grew up on cattle ranches are leaving them in droves. B. The buffalo business, on the other hand, is chipping along. · Chi-chi gourmands and the fat-avoiders are driving demand skyward and along with it, prices. · While a healthy cow and her calf sell for $600-800, a pregnant buffalo heifer sells for $3000-5000. · Some 20,000 buffalo are slaughtered annually. About 135,000 cattle are butchered every day. There are problems with the buffalo producers though. They produce fewer pounds of choice meat per carcass. More than a third of the animal is ground up into buffalo burger, meat too lean to make good patties. Hence, there is a huge surplus of ground buffalo. In May 1999, the Department of Agriculture announced it would buy 25 percent of the industry's ground-meat production and give it to federal nutrition programs. They will pay $3.45 per pound, more than twice as much as it pays for beef. Sources: John A. Baden, "Taxpayers Get Buffaloed," The Wall Street Journal, June 24, 1999, p. A22, and Mindy Sink, "Judge Puts Hold on Grazing," New York Times," June 1, 2002, p. 11. IN 150-200 WORDS, ANSWER THE QUESTIONS BELOW (the total word count for the 5 questions) 1 Name an example of the invisible hand at work from the case. 2. Who would be better able to analyze this market, a microeconomist or a macroeconomist? 3. How would you describe the opportunity cost for cattle ranchers? 4. Is this an example of positive or normative economics? 5. Name a social, political, and economic force from the case.
SCENERIO : Buffaloes Bill the Taxpayer Back home on the range, a funny thing is happening to the beef cattle and buffalo businesses. A. The news for cattle ranchers is not good. · The national cattle herd has been in decline for the past twenty years. · Per capita consumption of beef is down 20 percent in t
16. Using the AS/AD model on the graph below demonstrate/draw in the effect from the real problem on the general economy associated with each of the following events in the last year.. Label clearly all lines and movements/shifts. For a): The deep fall in the stock market Fall 2008 to early March 2009 on Aggregate Demand
10 QUESTION Study Guide 1. Research shows that after-school jobs are highly correlated with decreases in grade point averages. Those who work 1 to 10 hours earn a 3.0 GPA and those who work 14 hours or more earn on average a 2.6 GPA. Higher GPAs are, however, highly correlated with higher lifetime earnings. Assume that a st
In an expansionary fiscal policy to overcome the current recession, the Federal Government increases its spending to impprove the nation's physical infrastructure (roads, airports, seaports, airports, etc) A-Show graphically what happens to equilibrium income, interest rate, and price level using the Aggregate Demand Aggreg
Assuming that the aggregate price level is constant, the interest rate is fixed, and there are no taxes on foreign trade, how much will the aggregate demand curve shift and in what direction if the following events occur? A. An autonomous increase in consumer spending of $25 billion; the marginal propensity to consume is 2/
1. Describe how the concept of scarcity affects the aggregate supply curve. 2. Suppose the government mandates that all companies over 50 employees must provide an increased level of health care benefits. Could you please explain what effect this will have on the aggregate supply curve. 3. Assume the economy is at equil
If there is a recessionary gap in the short run, then in the long run a new equilibrium arises when input prices and expectations adjust downward, causing the aggregated supply curve to shift downward & the right & pushing equilibrium real GDP back to its long run potential value. The Federal Reserve can eliminate a recessionary
If the Fed increases the money supply, then a. the interest rate declines and the quantity of money demanded increases b. the interest rate declines and the quantity of money demanded declines c. the interest rate increases and the quantity of money demanded increases d. the interest rate increases and the quantity of money
The demand for money varies a. directly with both the price level and the level of real GDP b. inversely with both the price level and the level of real GDP c. inversely with the price level and directly with the level of real GDP d. directly with the price level and inversely with the level of real GDP e. inversely with th
Assume that a small town uses a referendum to overcome the free ridership problem and determine how its residents might value a new water filtration system for its public water supply. The voting results are aggregated by the town's two districts, yielding the following demand estimates: District 1: Q=160-20P1 Distr
The slope of the short run Aggregate Supply (AS) curve is important because it (a) explains the impact of supply side policies on the economy. (b) explains the impact of both supply and demand side policies on Y and P. (c) partially explains the impact of AD stabilization policies on Y and P. (d) None of the above. In the a
Competitive market prices are determined by the interplay of aggregate supply and demand;individual firms have no control over price. Market demand reflects an aggregation of the quantities that customers will buy at each price. Market supply reflects a summation of the quantities that individual firms are willing to supply at d
Please help with the following problem. You observe that output is above full-employment output. Politicians are arguing about the possible reasons. One party claims that this is due to a drop in world oil prices. The other party claims that this is due to an increase in consumer spending. Using aggregate supply-aggregat
Assume that the economy is already in a recession, and both the President and Congress have decided to do something to restore the economy. Both agree that lowering taxes would not be a good idea, but do believe that it is in the best interest of the economy to increase government spending in defense, education & infrastructure
Assume that the economy is already in a recession, and both the President and Congress have decided to do something to restore the economy. Both agree that lowering taxes would not be a good idea, but do believe that it is in the best interest of the economy to increase government spending in defense, education & infrastructure.
See attached file for full problem description. The Long Tail, Chris Anderson, (2006), "Ch. 1: The Long Tail," pp. 15-26. "Ch. 3: A Short History of the Long Tail," pp. 41-51, "Ch. 4: The Three Forces of the Long Tail," pp. 52-57. You can go to www.wardhanson.com/econ153 and see all the notes and resource.
Draw out multiple supply/demand graphs and identify (in color) where you have: 1) Consumer Surplus, 2) Producer Surplus, 3) Consumer Deadweight Loss, and 4) Producer Deadweight Loss.
Which of the following changes to fiscal policy would have a larger overall impact on Aggregate Demand? Explain your answer in a paragraph or 2. -A program of tax rebates, distributed uniformly across the population of those filing tax returns, amounting to $10 billion in total rebates. -OR- -
Most commercial fish species in nearly every ocean and sea are being rapidly depleted. The world's fisherman & vessels represent twice as much fishing power as major stocks of fish can sustain. Assume that ocean fishing resembles a competitive market in the following ways...there are no significant barriers to entry and ther
Describe how the following events change the aggregate demand curve: a. a decrease in money demand caused by the introduction of a new electronic money card b. a decrease in the money supply c. an increase in the price level d. an increase in government taxes
Why does the government spend money surveying consumers and firms on their current level of confidence in the economy? How might the Federal Reserve react to a sudden drop in consumer confidence? Use IS-LM analysis (DRAW IT) and explain it to support your answer.
Now we will solve for the steady state in a calibration of the US economy in 2000. In this problem, you will assume that the rate of growth of the work force is n = 0.017 and there is no exogenous technological progress. The aggregate production function for the US economy in 2000 is Y = (11.5)K 1/3 L 2/3 . The units are bill
According to Gerald Baker, columnist for the London Financial Times, November 23, 1999, "In the United States, banks are, by whichever measure chosen, in unusually good shape for this stage of an expansion. There are few signs of emerging excesses that even undermined America's own banking system at the end of the 1980's...Agai
The question asked that suppose that the Organization of Petroleum Exporting Countries raises oil prices by 50 percent in 2005. What effect will thishave on the U.S. Aggregate demand curve? On the U.S. Short-run aggregate supply curve?
Please see the attachment. I require very specific explanations for each part. If necessary, assumptions may be made but please make these explicit and make sure they are reasonable so that I can follow what you did. Also make the solutions as technical as possible. (See attached file for full problem description)
Answers to questions: Regarding the economy's adjustment process, use the AD/AS model to: a) Show the short-run effects of an increase in desired saving(assuming that the economy is initially in a long-run equilibrium with Y* = Y). b) Describe the adjustment process that brings the economy to its new long-run equilibriu
Why can output rise "without inflation" in the "Keynesian" range of the aggregate supply curve?