Question 1 Consider a small open economy with a fixed exchange rate system. Suppose there is a general expectation that the central bank will revalue the domestic currency in the future (i.e. it will reduce the fixed exchange rate defined as the amount of the domestic currency per unit of foreign currency). Explain the shor
You suddenly realize that your demand estimates might have some uncertainty in them. How might you change the amount of surplus you give to the consumers because of this? When you do not know the right demand, you cannot set the right price. So, instead of setting the price first, how can you find out the right price when th
The demand for new motor homes in the United States is highly cyclical and sensitive to diesel fuel prices and interest rates. Given these characteristics, describe the effect of each of the following on the quantity demanded or the demand for new motor homes. Indicate whether the effect of each of the following is an upward o
What is meant by productivity, cost, and firm demand for one production factor. Can you please explain?
(Money Supply Versus Interest Rate Targets) Assume that the economy's real GDP is growing. What will happen to money demand over time? If the Fed leaves the money supply unchanged, what will happen to the interest rate over time? If the Fed changes the money supply to match the change in money demand, what will h
Suppose you are an aid to a government official deciding on some recently proposed excise tax on the welfare of her constituents. One way of measuring the impact on her constituents is to determine how that tax change affects the level of consumer surplus enjoyed by her citizens in her area. By using a formal analysis and estima
See attached file for full problem description. --- 17-10 10. (External Costs) Use the data in the table to the right to answer the following questions. a. What is the external cost per unit of production? b. What level will be produced if there is no regulation of the externality?
(See attached files for full problem description) There are ten firms in a competitive industry, each with MC= 40-12q + q2 . Average cost is minimized at q=12 and Average Variable Cost is Minimized at q=9 for each firm. Demand for the product is given by P=160-Q, where Q represents industry output. A. Explain why the ind
Answer all three questions. 1. Discuss short and long run costs. For the short run discuss the relationship between cost theory and production theory and the concept of diminishing returns --- what is diminishing returns and how does it shape production and cost curves. Then, discuss the relationship between short run cost cu
Why do we have such extreme diversity in pay in the US---sport stars, actors, others making very high salaries while others make much less? What does economic theory tell us on this topic?
2 A ) Every demand curve must eventually hit the quantity axis because with limited incomes there is always a price so high that there is no demand for the good. B) If the elasticity of demand for long-distance calls is 1.5 and the price of long- distance calls falls by 20 percent as a result of increased competition from th
I am confused as to how to complete question 6. Not sure if i have the correct values, and if so, how to calculate the producer, consumer and social surplus. Also, lost on the per unit tax of 10 per unit and per unit subsidy of 50 per unit. Please find work and questions attached. --- 5) Supply P = 2Q + 170 Demand P
1. You are the Chief Economist of the Antitrust Division of the Department of Justice. There is a single producer of streaming video services that has a patent on the technology so that no one else can provide the service. But it only works on high speed access services. Assume that there is also a single provider of high spee
Law of Demand and Supply What is the motivation behind each of the laws?
I need your HELP answering this questions: 1. I need a brief history of the beef (cattle) Industry in the US 2. I need an overview (how the beef Industry stands now and how the beef Industry is doing now) 3. I need a SWOTT (Strengths, Weaknesses, Opportunities, Threats and Trends) analysis of the beef Industry 4 Is
I need your HELP answering these questions: 1. Explain how the circular flow diagram illustrates the interaction of households, governments, and business? 2. Illustrate market equilibrium using supply and demand curves? 3. Differentiate between movement along and shift of the demand curve? 4.Explain the relationship
Explain and discuss why the characteristics of the labor markets should result in the same wage rate for all jobs requiring the same level of abilities and skills? Why are earnings on the labor market are not always proportional to abilities? Demand for good workers = high pay demand for low workers = low pay Not proporti
Why are there significant disparities in the cost of living throughout the US? Unfortunately, I am somewhat lost on this one. I cannot think of one definitive answer to this question. I would think the lack of industry would play an important part in regional differences. Poor education such as that in Louisianna would be a m
Firm A is the dominant firm in a market where industry demand is given by Qd = 48-4P. There are four "follower" firms, each with long-run marginal cost given by MC= 6 + Qf. Firm A's long run marginal cost is 6. a. Write the expression for the total supply curve of the followers (qs) as this depends on price. (Remember, e
Rice is traded in a competitive world market. At the world price of $0.10 per pound, unlimited amounts of rice can be imported into Japan for purchase in the Japanese rice market. (e.g. There is an infinite supply of rice at the world price of $0.10 per pound.) The domestic demand and supply of rice in Japan is given by: (
My question is : 1)Why are prices generally higher for goods/services in London as opposed to Newcastle, or New York as opposed to San Fran? I understand that inflation is caused by excess demand/liquidity which causes the price of inputs such as raw materials to rise. But is the answer to the above question attributable t
I have 3 short Micro problems that I need some help with. Please provide detailed explanations.
Problems: For each of the following problems, provide a mathematical solution, well-labeled diagrams, and written explanations 1) Suppose the demand and supply curves for broccoli in the U.S. market are given by: Qd = 1000 - 5P Qs = 4P - 80 Quantities are in hundreds of bushels per year and price is in dollars per hund
1. What is the "real" exchange rate, and why are changes in it more important than changes in the nominal exchange rate. 2. Does the "real exchange rate" have meaning only for a country, or does it have meaning for a company, as well? Explain. 3. Suppose England's real exchange rate relative to the United States was 1.32
Need good reliable help to answer this question 4) Suppose the government proposes to cut taxes while maintaining the current level of government expenditures. To finance this deficit, it may either a) sell bonds to the public, or, b) print new money (via Federal reserve cooperation). -What are the likely eff
From The Wall Street Journal, Thursday, December 2, 2004: "Janet Yellen, president of the Federal Reserve Bank of San Francisco, said in a speech yesterday at Arizona State University that sustained high oil prices, business caution, the growing trade deficit, consumers' need to rebuild savings and the waning boost from tax cu
Problem 1 The government is attempting to support the alfalfa market price. The market for alfalfa is described in the following figure: graph in attachment (a) If the government purchases enough alfalfa to raise the price from $50/ton to $75/ton, what is the government cost? What is the gain/loss in surplus to the produ
Make the argument, pro's and con's, for returning to the gold standard. List the positive and negative effects of reversing the current policy. E.g., How might this affect international trade? Our trade balance? Our currencies value vis a vis other currencies? Why did the US abandon the standard in the first place? Full
Question #4 (a)Why was the AS/AD model developed, and what limitations of the S/D model did it overcome? (b) List a real world example that is not in the text that supports your response. Fully discuss the theory underlying each model, and why the AS/AD model is the preferred way to measure the economy, or is it?
Practice Problems Fall, 2004 State whether each of the following remarks is true, false or uncertain, and then give a brief (but good!) explanation as to why. Each remark is "worth" 12 points; 4 for "T, F or U", 8 for your explanation. 1. True, False or Uncertain: Sales and excise taxes are usually more harmfu