Macroeconomics Answers

Dupont has recently announced large layoffs at its delaware sites. even though you may not know anyone at DuPont, how would this affect you?

The economy begins in long-run equilibrium. Then one day, the president appoints a new chair of the Federal Reserve. This new chairman is well known for her view that inflation is not a major problem for an economy.

a. How would this news affect the price level that people would expect to prevail?

b. How would this change in the expected price level affect the nominal wage that workers and firms agree to in their new labor contracts?

c. How would this change in the nominal wage affect the profitability of producing goods and services at any given price level?

d. How does this change in profitability affect the short-run aggregate-supply curve?

e. If aggregate demand is held constant, how does this shift in the aggregate-supply curve affect the price level and the quantity of output produced?

f. Do you think this Fed chairman was a good appointment?

Apple Bite's is a small distributor of Ernest Inc. in a highly competitive healthcare industry. The market determining price of their product is $10. If apple Bite's TC function is TC= 100+ 2Q + 0.10 Q².

a) what is the firm's profit maximizing output?

aii) what is the firm's profit at the firm's profit maximizing output level?

iii) is apple in the long run or short run equilibrium? Explain

b) at $10, what is apple Bite's break even output level?

c) what is apple Bite's long run, break even price and output level?

d) what is apple Bite's shutdown price and output level? Does these price and output combination constitute the long run or short run competitive equilibrium. Explain

A perfectly competitive firm facing the following TVC function: TVC= 150Q - 20Q² + Q³, where q= quantity.

Below what price should the firm shutdown it's operations

A perfectly competitive industry consist of 300 firms with identical cost structures. Their respective market demand and market supply functions are given as Qd= 3000 - 60p and Qs= 500 + 40p.\na) what are the profit maximizing price and output for each individual firm.\nb) assume that firm's in the long run competitive equilibrium, determine each firm's TR, TC and profit.

 If you are a business in Ontario, it is possible to get a grant of up to $30,000 or 50% of costs related to growing your export market. For example, attending international trade shows, or creating a marketing plan for a new market. This funding comes from an annually reviewed and funded program to support exporters. Do you think this is a fair or an unfair trading practice? Explain.

Consider the firm with the following total monthly cost function.

Tc= 1000 + 0.01Q².

The firm operates in a perfect competitive industry and sells its product at the market determining price of $ 10.

To maximize total profit, what should be the firm's monthly output level and how much economic profit will the firm earn each month.

Problem 1

People in Haiti Island live on buying cloth and rice. The CPI basket contains the quantities bought in 2007. The average household spent 30$ on cloth and 40$ on rice when the price of one packet rice is 4$ and that one piece of cloth is 6$. In 2008 the packet of rice costs 5$ and a piece of cloth costs 8$.

Refer to problem 1. The percentage of household’s budget spend on rice in 2007 is equal to ____ *

a) Suppose government moves from a balanced budget to a budget deficit. Use the loanable funds market to explain what happens to the rate of interest, private investment spending, private saving, private consumption spending, public saving and national saving.

b) Explain using diagrams what happens to the rate of interest, consumption, investment, and aggregate demand if the Central Bank sells government bonds to the public.