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Supply and Demand

General economics question

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

Factors that create a drag on the economy

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

Calculate the lost consumer surplus.

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

Gold standard help

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

AS/AD & S/D Models

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?

Need Help with these problems

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

Explain substitution and output effects on labor

Problem: The technology of a firm making high end, solid gold bracelets in Soho (NYC) is described by the production function: q = 6.0 L3/4K1/5 where q is the number of bracelets produced per year, L is the number of metallurgist employed by this firm and K is the number of capital units used, measured in square foo

Aggregate Demand

You have been appointed economic advisor to Examland. The mpc is 0.6; investment is $1000; government spending is $8000; consumption is $10000; and next exports are $1000. a. What is the level of income in the country? b. Net export increases by $2000. What will happen to income? c. What will happen to unemployment? (Remember

ABC analysis for inventory control, EOQ

Please see the attached file for full problem description. TABLE 11.3 DOLLARS OF ADDITIONAL SALES NEEDED TO EQUAL $1 SAVED THROUGH THE SUPPLY CHAIN PERCENT OF SALES SPENT IN THE SUPPLY CHAIN PRESENT NET PROFIT OF FIRM 30% 40% 50% 60% 70% 80% 90% 2 $2.78 $3.23 $3.85 $4.76 $6.25 $9.09 $16.67 4 $

Interest rates and the money supply

1. Explain how the Bank of Canada can influence interest rates and the money supply in Canada. Be specific about the tools that are available to the Bank for such purposes. Explain how these tools would be used for expansionary policy. Question also in attachment.


1.1Smokers: Old and New Explain in terms of elasticities, why placing a tax on cigarettes might reduce teenage smoking while simultaneously raising revenues from older smokers with a more-than-a-pack-a-day habit. 1.3 "Part Forces Hawaiian to Cancel 18 Flights" ) The Honolulu Advertiser Monday, February 14, 2000 Karen

Profits in competitive firms

In a short-run situation in which quantity demanded equals quantity supplied in a competitive industry, with price greater than the average cost of the typical firm, A) total profits across the market are negative and some firms will be forced to leave. B) The profit of the typical firm must nonetheless be zero so that fi

Labor Wages

Suppose the government imposes a minimum wage of $5. What is the total wage paid to labor in the figure? See attached file for full problem description.

Excise tax - supply curve

The government levies an excise tax of 5 cents per unit sold on the sellers in a competitive industry. Both supply and demand curves have some elasticity with respect to price. This tax means that the: A) supply curve shifts to the left by 5 cents, but (unless demand is perfectly elastic) price will not rise. B) supply c


29. A shortage of OPEC oil raises oil prices because of: A) the law of elastic supply. B) the law of elastic demand. C) the downward-sloping demand curve. D) all of the above. E) none of the above.


Category: Economics > Microeconomics Subject: Long Run Details: In the economic theory of the firm, we generally discuss only two factors, labor and capital, and in the short run labor is the variable factor and capital is the fixed factor of production. The long run is a period of time that is long enough for all factors of

Fed Funds market

Explain why the Fed must normally add reserves to the banking system via open market operations on most days in order to maintain its interest rate target in the Fed Funds market.

Econometrics, Regression, Tariffs

1) Consider a competitive market where inverse supply and demand are given by: D: P = 160-2Q S: P = 50+3Q A) Solve for the equilibrium price. B) If a $10 per unit tax is placed on this good, how much of the tax is paid by consumers? How much of the tax is paid by the firm? Show your work and explain in a senten

Change in excess reserves and expansion multiplier.

The required reserve ratio is 5% Assets: Liabilities: Cash- $24 mil Demand Deposits- $180 mil Deposits w/ Fed.- $16 mil Time deposits- $10 mil Loan- $100 mil Capital- $10 mil Treas. Securities- $60 mil So I got the following: Level of reserves is $40 mil.


1. If the public's demand for US currency increased by $100 Million what action in the "open market" would the Fed have to take to prevent bank reserves from falling? 2. Which of the following A or B would have a larger impact on AD? Explain your answer. A) A program of tax rebates distributed uniformly across the pop

Free Trade / Surplus

2. The world price of wine is below the price that would prevail in the United States in the absence of trade. a. Assuming that American imports of wine are a small part of total world wine production, draw a graph for the U.S. market for wine under free trade. Identify consumer surplus, producer surplus, and total surplus

Policy in the war on drugs supply side

1-Discuss the limitations of the U.S. "supply side" policy in the war on drugs. Can we win the war on drugs? explain your position on legalization. Why does prohibitionism policy by gov. lead to a) an increase in poverty crime, b) an increase in violent crime, particularly crimes with handguns?Discuss in terms of the pros and co

Exchange rate problem

Examine the effects of a change in the money supply in an open economy under a flexible exchange rate system. How are your conclusion affected by the adoption of a fixed exchange rate?

Microeconomics help

Mali Apples 40 32 24 16 8 0 Bananas 0 4 8 12 16 20 US Production Possibilites apples 75 60 45 30 15 0 Bananas 0 5 10 15 20 25 Based on above info 1. graph each country's production possibilites curve. 2. On the graph for Mali, a. show a production point not attainable at this time b. show a point of ineffic

Find P* and Y*?

The model with nominal rigidities is: yd = m - p + v, ys = b(p - E[p]) +b(u - a E[u]), w = E[p] + a E[u], a = aà?/d+à?. And The model without nominal rigidities is: yd = m - p + v, ys = b(1-a)u, w = p + au, a = aà?/d+à?. Find P* and Y* for model with nominal rigidities?