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# Macroeconomics

### A mathematically fair bet: Is gambling irrational

A mathematically fair bet is one in which the amount won will on average equal the amount bet,for example, when a gambler bets say, \$100 for a 10 percent chance to win \$1000 (\$100=.10x\$1000). Assuming diminishing marginal utility of dollars, explain why this is not a fair bet in terms of utility. Why is it even a less fair bet w

### CPI calculations

1. Between 1929 and 1933, GDP measured in current prices fell from \$96 billion to \$48 billion. Over the same period, the relevant price index fell from 100 to 75. a. What was the percentage decline in nominal GDP from 1929 to 1933? b. What was the percentage decline in real GDP from 1929 to1933? Show your work. 2. Compute

### Olipology Markets

When he retired as CEO of American Airlines, a position he held for 18 years, Robert Crandall was described in a Newsweek article (June 1, 1998) as "one tough [expletive]." Other nicknames Crandall garnered during his career included Fang, Bob the Butcher, and Wretched Robert. Newsweek noted the Crandall's "salty language and b

### Profit Maximizing Strategy

Firms that make gaming systems typically charge a price close to average cost on the game system itself, and do not change that price even when the systems are scarce or demand increases. Why is this a profit maximizing strategy?

### Assessing PMT

Please help solve this. A philanthropist working to set up a permanent endowment wants to deposit money each year, starting now and making 10 more (i.e., 11) deposits, so that money will be available for research related to planetary colonization. If the size of the first deposit is \$1 million and each succeeding one is \$100,

### Minimizing average cost

The total cost of producing Q units of a commodity is: C(Q) = 4Q^2 + 40Q + 36 Q > 0 Show that the Q that minimizes the average cost A(Q) also is the Q where the marginal cost is equal to the average cost.

### Inflationary Pressures

Testing procedures required by the US Food and Drug Administration raise the cost and price of drugs. Should we eliminate such requirements in order to ease inflationary pressures? How about the regulation of hot dog content?

### The areas affected by this practice are generally populated

The areas affected by this practice are generally populated by people of color. So, isn't raising the standards a form of discrimination? If credit-worthy people in these areas can't get loans, how will the economic status of the areas ever improve?

### Prepare a memo to the managing director that explains the different vehicles available that can be used for each of the following: Minimize income tax Minimize capital gains tax Minimize estate tax Concentrate on the vehicles, not the strategies.

Prepare a memo to the managing director that explains the different vehicles available that can be used for each of the following: Minimize income tax Minimize capital gains tax Minimize estate tax Concentrate on the vehicles, not the strategies.

### Optimal Pricing Strategy Choice

You own a franchise of rental car agencies in Florida. You recently read a report indicating that about 80 percent of all tourists visit Florida during the winter months in any given year, and that 60% of all tourists traveling to Florida by air rent automobiles. Travelers not planning ahead often have great difficutlty findin

### Production cost relations

You have been hired to manage a small manufacturing facility, which has cost and production data given in the table attached. Workers Total Labor Cost Output Total Revenue 1 \$500 100 \$700 2 1000 280 1150 3

### Macroeconomic variables are studied.

What variables other than price appear to have the biggest impact on the demand for McDonaldâ??s products? How much influence does the company have over these variables?

### Between October 2004 and 2005, real GDP in the United States

Between October 2004 and 2005, real GDP in the United States increased by 3.6 percent, while nonfarm payroll jobs increased by only 1.4 percent. How is it possible for output to increase without a proportional increase in the number of workers? What are the implications in our economy of more output being produced by less worker

### Overview of Hegemony is presented.

What is American hegemony? What are the advantages and disadvantages of hegemony status?

### the value of the simple multiplier.

Use the information in the table to calculate the value of the simple multiplier for the following economy. Year Income(Y) Consumption (C) Savings (S) Investment (I) (m) (m) (m) (m) 1 200 160

### The Wealth Effect

if every \$1,000 increases in the real price of homes adds 5 cents to annual consumers spending (the "wealth effect"), by how much did consumption decline when home prices fell by \$2 trillion in 2006-8?

### Money Supply and Velocity

If the government increases the money supply by 50%, and the velocity of money and real GDP remain constant a) what percentage will the inflation tax be? b) what percentage increase or decrease will the value of real cash balances be? Please show steps and reasoning.

### What is the nominal GDP?

Number 1. Year Price of Good 1 Quantity of Good 1 Price of Good 2 Quantity of Good 2 2006 \$2 5 \$4 10 2007 \$4 10 \$8 5 The table above shows the prices and quantities of two goods produced in a country in 2006 and 2007. These are the only goods produced in the country. What is the nominal GDP in 20

### Analyzing the Purchasing Power of Workers

The New York Times cost \$0.15 in 1970 and \$0.75 in 2000. The average wage in manufacturing was \$3.23 per hour in 1970 and \$14.32 in 2000. a. By what percentage did the price of a newspaper rise? b. By what percentage did the wage rise? c. In each year, how many minutes does a worker have to work to earn enough to buy a news

### Rate of return for Jean Splicer

Suppose Jean Splicer, an investor, buys \$300,000 of shares of stock in a diversified bundle of Bio-tech firms and exactly one year later sells those shares for \$315,000. Assume the value of the CPI at the date of Jean's purchase was 180 and rose by the sale date one year later to 190 while the value of the GDP Deflator was 120 a

### Managerial Economics

Use the following data for a perfectly competitive firm and the profit-maximizing input-combination rule to identify how many workers the firm will employ to maximize profits. Number of Workers (L) MRPL MRCL 1 \$200 \$30 2 150

### Gross Domestic Product

The GDP is the value of all final goods and services produced: within the nations boundaries. by domestically owned companies. by citizens of the country. by domestically controlled companies.

### WHICH COMPONENT OF AD DECLINED THE MOST?

THE RECESSION OF 2001â?"WHICH COMPONENT OF AD DECLINED THE MOST? Use the interactive feature of the Bureau of Economic Analysis Web site, www.bea.gov, to access the National Income and Product Account Tables. Select Interactive Data Tables, which is listed under Publications. On that page, select National Income and Product Acc

### Use the GDP data from 1929 to 2008 collected in the first part of this assessment (Assignment 4 Data Collection) to match the following GDP numbers with the corresponding year. (Points : 10) : 103.6 1 : 1981 : 86.1 2 : 1938 : 101.4 3 : 1983 : 3536.7 4 : 1940 : 3128.4 5 : 1929

Use the GDP data from 1929 to 2008 collected in the first part of this assessment (Assignment 4 Data Collection) to match the following GDP numbers with the corresponding year. (Points : 10) : 103.6 1 : 1981 : 86.1 2 : 1938 : 101.4 3 : 1983 : 3536.7 4 : 1940 : 3128.4 5

### Why charge on a marginal basis?

Please comment: If a fixed number of industrial polution permits are marketable, then we should just sell the right to smoke to the highest bidders rather than ban smoking outright in many cities, towns, business outlets, restaurants, and bars. It would reduce the economic losses and make the market more efficient.

### Calculate the range for beauty lotion

Beauty lotion is a skin-moisturizing product that contantains rich oils, blended especialy for overly dry or neglected skin. The product is sold in 5-once bottles by a wide range of retail outlets. In an on going review of product quality and consistency, the manufacturer of Beauty Lotion found a sample average product volume of

### Real GDP rose by what percent?

Show calculation and explain answer Suppose nominal GDP in 2005 was \$14 trillion and in 2006 it was \$15 trillion. The general price index in 2005 was 100 and in 2006 it was 103. Between 2005 and 2006 real GDP rose by what percent?