Search & Filtering
A consumer has $25 in budget to purchase goods X & Y. Assume Px = 3 and Py=1. What is the maximum amount of Y that she can buy?
A1-1. Suppose two countries with the same population each start with 10 unemployed workers and 90 employed workers. Subsequently 5 workers in country A find jobs and become employed, while in country B, all 10 of the unemployed become discouraged and leave the labour force. Because country B’s rate of unemployment falls from 10% to 0%, while country A’s only falls from 10% to 5%, we can say that the labour market outcome in Country B is superior to that in Country A.
Suppose that the economy of Stormwind has the following features:
The level of private saving is $200.
The level of investment expenditure is $100.
The level of exports is $75.
The level of imports is $125.
If Stormwind's economy is in equilibrium, the level of public saving would be equal to $
nothing
. (Round your response to the nearest dollar.)
The level of public saving shows that the government in Stormwind has a budget ▼
deficit
surplus
.
If the level of government purchases is $200 in Stormwind, the level of taxes must be $
nothing
. (Round your response to the nearest dollar.)
The government of Selgina is serious about drugs. Possession of drugs is illegal and is severely penalized. However, a black market exists which the government has failed to dismantle despite serious attempts. Khusenichho Chamling, the health minister, is worried about the situation. In early 2019, a consultant working with health ministry suggested that the government should increase the price of a pack of cigarettes from 200 Selgina dollars ($) to $600. A survey conducted in December 2019 suggested that over the year, the quantity demanded of marijuana decreased from 2,000 kgs per day to just 800 kgs. Calculate the cross elasticity of demand and tell why the policy has proved so effective.
In the light of Keynes's view about the difference between risk and uncertainty, explain each of the following ideas from Keynes:
a: It might be rational (rather then simple illusion) for workers to make labor supply decision based on relative money wages rather than real wages;
b: Households base their consumption and savings decisions on current income rather than wealth
What is implied about the relationship between money and interest rate when money is made the independent variable - that is when the demand for money function is inverted?
In what way is it favourable to monetarist views if the demand for money is correctly specified in real terms?
Compare and contrast the Monetarist theory of money demand curve with the Keynesian theory of money demand. Specifically, make sure to talk about how each model views the behavior of velocity over the business cycle.
1. Consider the market for rye bread. Using normal supply and demand curves, draw a properly labelled graph and show the equilibrium price and quantity exchanged in the rye bread market. Now use your supply and demand analysis to graphically illustrate each of the following in the rye bread market (you can either draw a separate graph for each of these items or you can use one well-labelled master graph; This question is worth 5 points):
a. The price of wheat bread (a substitute for rye bread) just fell by 50%. What happens in the market for rye bread?
b. Flour (which is an essential ingredient in rye bread production) has just doubled in price. What happens in the market for rye bread?
c. The US has decided to start selling rye bread to Cuba. What happens in the market for rye bread?
d. A new technology has just emerged that allows manufacturers to double their daily output of rye bread. What happens in the rye bread market?
Jazzieshizzle is a small economy with the nominal GDP of $440, real GDP of $80, and the money supply of $55. Calculate the price level and the velocity of money.
