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1. Assume books and newspapers are substitutes. Paper is used to make books. What will happen in the book market if the price of newspapers increases and at the same time the price of paper goes down?
Graphically and in words show what will happen to the market clearing price (P*), market clearing quantity (Q*). Be sure to label your axes correctly and make it clear which way you are shifting your graphs. Assume ceteris paribus
Alem quits her administrative job, which pays 40,000 ETB a year, to finish her four-year college degree. Her annual college expenses are 8,000 ETB for tuition, 900 ETB for books, and 2,500 ETB for food. What is her opportunity cost of attending college for the year?
Suppose that the monetary base (B) is $ 1000 billion, the reserve deposit ratio (rr) is 0.2, and the currency-deposit ratio (cr) is 0.12. Find the total money supply.
If the price level as measured by the CPI was 150 in 2018 and the project price level for 2019 is 120. Calculate the expected inflation rate between 2018 and 2019
1) suggest an economic policy could be used and explain how the implementation will be change a price level
Assume the following:
• Brad and Jenny both produce food and dishes;
• Constant opportunity costs;
• Brad can produce 100 tonnes of food or 100 tonnes of dishes;
• Jenny can produce 400 tonnes of food or 200 tonnes of dishes;
• In autarky (i.e. self-sufficiency without trade) each person produces both goods and the optimal mix before the trade for Brad is (80) tonnes of food and (20) tonnes of dishes. For Jenny, the optimal mix before the trade is (300) tonnes of food and (50) tonnes of dishes.
a) What is the opportunity cost of 1 tonne of food for Brad? What is the opportunity cost of 1 tonne of dishes for Brad? What is the opportunity cost of 1 tonne of food for Jenny? What is the opportunity cost of 1 tonne of dishes for Jenny?
b) Which person has a comparative advantage in food and which person has a comparative advantage in dishes?
c) What are the minimum terms of trade that each person would be willing to accept in order to trade?
Discuss the need for and problem associated with the administration of subsidies?
suppose we have two investment ptojects , both with initial cost of one billion.Both projects have zero return in period year 1, when they are built. project 1 return 0 in period 1 and 4 in period 2. project two on the other hand returns 2 million in period 1 and 1 million in period 2. the costs and returns of two projects are summarized in the table below?
Graph showing substantial increase in price and real income level of population decreases
Explanation of Graph showing decrease in a population and increase of fertilizers
