Economics of Enterprise Answers

Every year, the President creates the budget for the federal government. This process involves deciding between raising taxes or lowering taxes, and increasing government spending or cutting some government programs to save money (decreasing government spending).

In this scenario, the current state of the economy is as follows:

Real GDP has fallen
Unemployment rates are rising
Prices are falling slowly (deflation)
Based on the information above, how would you advise the President? Give at least 2 pieces of advice that you would give.

The accompanying table shows a portion of the number of cases of crime related to gambling (Gambling) and offenses against the family and children (Family Abuse) for the 50 states in the United States during 2010.

Many U.S. households still do not have Internet access. Suppose 25 out of 80 households in a small southern town do not have Internet access. A company that provides high-speed Internet has recently entered the market. As part of the marketing campaign, the company decides to randomly select ten households and offer them red laptops along with a brochure that describes their services. The aim is to build goodwill and, with a free laptop, tempt nonusers into getting Internet access.

Explain how increased liquidity (easy money) created through Treasury open market operations and changes in the discount rate are supposed to affect interest rates and GDP?

You are planning to open a restaurant. You estimate the following monthly costs:

Rent: 1500
Insurance: 400
Fixed salaries: 5600
Other fixed costs: 2000

An avarage customer will spend 25 EUR per visit at your restaurant (including 14 % VAT).
Variable costs per customer (including raw materials for food, expenses for serving the customer, etc) would be 13 EUR on average.
The restaurant would be open every day. How many customers on average would be needed per day to break even? (Assume 30 days per month)

suppose apple and samsung who do not communicate are engaged in a small phone sales games and each firms seek yk maximize profit.the first set high price to low price.if both price each makes $100 profit per phone.if one sets a low price an the other a high price,the high price firms makes $500 profit per phone and the low price firms makes $50.if both set low price,then each makes $200 profit phone.what would be the equilibrium outcome of the game?would the equilibrium outcome be better off or worse off to both apple and samsung? explain why

6. Describe how monetary policy can be used to control the business cycle.

By ___________ interest rates and ____________ the lending of money, a government can make it more expensive to borrow money. It can also ________ the supply of investment capital by restricting the amount of money available for loans. These both tend to _________ growth, since producers often need to borrow money to expand production. This makes it less likely that a _______ will turn into a recession. The opposite approach — __________ interest rates and freeing up investment capital — leads to an expansion of supply, _________ the economy's rate of growth, which can produce a recovery.

6. Describe how monetary policy can be used to control the business cycle.

By ___________ interest rates and ____________ the lending of money, a government can make it more expensive to borrow money. It can also ________ the supply of investment capital by restricting the amount of money available for loans. These both tend to _________ growth, since producers often need to borrow money to expand production. This makes it less likely that a _______ will turn into a recession. The opposite approach — __________ interest rates and freeing up investment capital — leads to an expansion of supply, _________ the economy's rate of growth, which can produce a recovery.

car manufacturing should continue to produce additional cars as long as the firm is profitable justify