Macroeconomics Answers

In a closed economy

Y= c+i+g

C= 900+0.5(y-t)

I= 700-30r

T= 800

G= 1200

Md=Ms

Ms=1500

Mt=0.7y

Msp= -80r

Derive the IS and LM equations of the economy.( Express y as a function of r and assume p is fixed at 1.0)

Calculate the short run equilibrium values of y and r in the economy.

 Given P = 24 – 0.1Q, where Q = q1+q2 and q1 = q2, TC1 = 0.1q1 2 , TC2 = 0.05q2 2 , a) Determine the output and price of low-costfirm b) Calculate the profit of the low-cost firm c) What isthe profit maximizing price level the high firm would like to charge but that doesn’t realize in the market? d) Compare the profits of the price taker at its own profit maximizing output and low-cost firm’s output e) Show the results a to d graphically 

Find the marginal cost functions for each of the following average cost functions. a) AC = 1.5Q + 4 + 46 𝑄 b) AC = 160 𝑄 + 5 - 3Q + 2Q2

Find the marginal cost functions for each of the following average cost functions. a) AC = 1.5Q + 4 + 46 𝑄 b) AC = 160 𝑄 + 5 - 3Q + 2Q2

How does the provision of social security effect people's incentive to save while wroking?

a fiscal measure has no effect upon the level of income if____________

Y= c+I+g

C= 900+0.5(y-t)

I= 750-30r

T=800

G=1200

Md=Ms

Ms= 1500

Mt=0.7y

MSP=-80r

Derive ( Md/P) the demand for real money balances equation

Describe how a tax placed on the production of computers can affect supply

Economic indicators used to measure each macro-Economic objective

(a)Construct an annual ‘coffee price index’ for this time period using 2005 as the

base year. [Hint: follow the procedure detailed in the chapter – divide each yearly

price by the base year price.]