Macroeconomics Answers

A manufacturer can produce at a cost of $10 apiece an estimated if they are sold for x dollars, consumers will buy approximately 80-x radios each month. Express the manufacturer's profit as a function of the price x, graph this function and determine the price at which the manufacturers profit will be greatest.

Let’s consider watching movies and focus on the movie theater experience. Let’s pretend that the movie theater industry is in perfect competition and that the equilibrium price of a movie at the theater should 13 be $10 and the equilibrium quantity should be 50 movie goers. Let’s say the theater has a full capacity of 100 people. a. Let’s first think of an empty movie theater (say only 5 people go /). In a standard supply and demand setting, illustrate this scenario. Be sure to label everything properly! Is an empty movie theater an example of a surplus or shortage? Show this on the graph. b. Based on your answer in a., how large is this surplus or shortage? (note this will depend somewhat on how you draw the graph so there is a large subset of right answers. There is still a much larger subset of wrong answers though so be sure to label things properly!) How should the movie theater respond in this situation? Why?

Suppose, the economy is in both short run & long run equilibrium. The OPEC has decided to raise the oil prise. What will happen to the equilibrium condition of the economy? How the adjustment towards equilibrium will take place? What is the term used for this type of economic situation?

Which of the following has no effect on GDP? A. Buying a 1957 Chevy from a friend B. A musician makes a music CD, C. A college buys a computer or D.The Dept of Transportation repaves a road?

Given are the following information for the three sector economy,

C = 600 + 0.8Yd

I = 400

G = 200

T = 300

All values are in RM million.

A) Derive the:

i) consumption function after the tax. [2 marks]

ii) saving function after the tax. [2 marks]

B) Calculate the equilibrium income level for the above economy.

C) If the full employment level of income is RM6, 400 million, calculate the:

i) inflationary gap or deflationary gap.

ii) required tax changes to achieve a full employment level of national income.

D) If the government increases the government spending of RM80 million and reduces the tax by RM80 million at the same time, calculate the new equilibrium level for the above economy.

Given are the following information for the three sector economy,

C = 600 + 0.8Yd

I = 400

G = 200

T = 300

All values are in RM million.

A) Derive the:

i) consumption function after the tax. [2 marks]

ii) saving function after the tax. [2 marks]

B) Calculate the equilibrium income level for the above economy.

C) If the full employment level of income is RM6, 400 million, calculate the:

i) inflationary gap or deflationary gap.

ii) required tax changes to achieve a full employment level of national income.

D) If the government increases the government spending of RM80 million and reduces the tax by RM80 million at the same time, calculate the new equilibrium level for the above economy.

Distinguish between the inside and outside money which of this is relevant to the pigou effect and why?

What is meant by supply of money how it is determined?

How will you distinguish the cycle theory of consumption from the other theories of consumption?

Explain and examine the financial theory of investment ?