Search & Filtering
3. Suppose local governments throughout the United States increase their tax on business inventories. What would you expect to happen to U.S. investment? Why?
2. If saving dropped sharply in the economy, what would likely happen to investment? Why?
The text defines the Malthusian trap as: “A point at which the world is no longer able to meet the food requirements of the population, and starvation becomes the primary check to population growth.” In other words, population will outpace food production.
Discuss whether you believe this trap has been avoided for the next 100 years. Consider government policies (like China’s one-child policy), the use of genetically engineered crops, social patterns of family size, and environmental factors.
Please answer in 200 words or more.
2. If saving dropped sharply in the economy, what would likely happen to investment? Why?
3. Suppose local governments throughout the United States increase their tax on business inventories. What would you expect to happen to U.S. investment? Why?
4. Suppose the government announces it will pay for half of any new investment undertaken by firms. How will this affect the investment demand curve?
The circular flow model for goods and services is where … .
a. the households sell their factors of production to the factor market where they are purchased by firms
b. firms consume goods and services offered on the goods market
c. firms combine factors of production and produce goods and services
d. goods and services are offered for sale on the factor market
[1] Only a.
[2] Only a and c.
[3] Only a, c and d.
[4] Only d
Consider a consumer whose utility function is given as: U (x, y) = xy, where x and y denote the quantities of goods x and y consumed. The budget constraint faced by the consumer is: 4x + 8y = 120, where 4 is the price of good x, 8 is the price of good y and 120 is the income of the consumer.
(a)From the utility function find the expression of the Marginal Rate of Substitution for our consumer. Find the typical equation of an Indifference Curve for our consumer.
b Find the optimal quantities for x and y consumed by the consumer. Show your solution diagrammatically.
c Following on the answer in b, now assume that the price of good x increases to 8. Find the new quantities consumed by the consumer
dFind the Substitution and Income effects associated with the increase in the price of x. Show your results in a graph. Given your result, would you say that good x is a normal good? What about good y?
Most countries, including the United States, import substantial amounts of goods and services from other countries. Yet the chapter says that a nation can enjoy a high standard of living only if it can produce a large quantity of goods and services itself. Can you reconcile these two facts?
True/False/Uncertain. Why? (Justify your answer with a short argument.)
Evidence suggests that happiness in rich countries increases with output per person
Evidence suggests that happiness in rich countries increases with output per person
Discuss the evolution of banks and the functions of the financial system.
