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Macroeconomics
1. Consider an industry in the U.S. facing aggregate (inverse) demand function:
p(y) = 1050 – 5y
The industry is currently in long run equilibrium. The market price is $225 and there are n = 11 firms producing. Each firm’s variable cost is:
cv(y) = [1] y3
a. What is each firm’s fixed cost?
Macroeconomics
Identify factors that are directly affect the multiplier value and explain how those factors may change the income equilibrium.
Macroeconomics
Calculate the equilibrium level of output
Macroeconomics
1) What do you know about political economy ? How do you distinguish And connect between politics And economy?
2) High levels of corruption and weak government institutions are associated with poor economic conditions—low levels of income, low growth rates, inequality. Propose a theory that relates weak governments and poor economic performance. Which way does the causal arrow go—from low growth to high levels of corruption or from high levels of corruption to low growth, or does it go both ways? Design a empirical test to try to sort out the conflicting empirical claims.
3) Some countries appear to suffer from a “resource curse”. They have plentiful natural resources but either do not grow or maintain high levels of poverty and inequality. What are the political/economic explanations for this phenomenon? How might it be “cured”?
2) High levels of corruption and weak government institutions are associated with poor economic conditions—low levels of income, low growth rates, inequality. Propose a theory that relates weak governments and poor economic performance. Which way does the causal arrow go—from low growth to high levels of corruption or from high levels of corruption to low growth, or does it go both ways? Design a empirical test to try to sort out the conflicting empirical claims.
3) Some countries appear to suffer from a “resource curse”. They have plentiful natural resources but either do not grow or maintain high levels of poverty and inequality. What are the political/economic explanations for this phenomenon? How might it be “cured”?
Macroeconomics
Find out aggregate income and aggregate consumption when investment increases by 100 crore in 2008.
Year 2006
Aggregate income 10000
Aggregate consumption 9000
Year 2007
Aggregate income 11000
Aggregate consumption 9900
Year 2008
Aggregate income ?
Aggregate consumption ?
Year 2006
Aggregate income 10000
Aggregate consumption 9000
Year 2007
Aggregate income 11000
Aggregate consumption 9900
Year 2008
Aggregate income ?
Aggregate consumption ?
Macroeconomics
What will be the equilibrium level of income and level of consumption in equilibrium if C=30+0.8Y and autonomous investment is 50 crore
Macroeconomics
Explain inflation rate, thatis using usually reported every month in media is obtained
Macroeconomics
Suppose that the information below describes the economy of Wonderland.
C = 300+0.8Yd
I = 300
G = 250
X = 300
M = 150 +0.6Yd
T = 0.25Yd
1) Suppose the investment (I) decreases with 50, calculate the new level of equilibrium income (Ye) by means of the MULTIPLIER
2) Calculate the tax income that the government of Wonderland receives at the equilibrium income level of question 1
C = 300+0.8Yd
I = 300
G = 250
X = 300
M = 150 +0.6Yd
T = 0.25Yd
1) Suppose the investment (I) decreases with 50, calculate the new level of equilibrium income (Ye) by means of the MULTIPLIER
2) Calculate the tax income that the government of Wonderland receives at the equilibrium income level of question 1
Macroeconomics
A. For Kabelo, a consumer of bread and sorghum will be in equilibrium position if the marginal rate of substitution between the two goods is equal to ratio of prices of the two goods.’’ Do you agree with the given statement? Justify your answer. (10 marks).
Macroeconomics
Show through the use of a diagram for the market (4 marks) and individual firm
(4 marks) the point as which firms stop entering the market. This applies to the
Long run position for the perfectly competitive market. Provide detailed
discussion of the diagrams.
(4 marks) the point as which firms stop entering the market. This applies to the
Long run position for the perfectly competitive market. Provide detailed
discussion of the diagrams.
