Economics Answers

Which perspective of sustainable development is of the view that we should revise our demands on the earths resources so as to live within it's limits? 1. Weak sustainability 2. Moderate sustainability 3. Strong sustainability 4. None of the above

What are the effects of the minimum wage?

An increase in costs will

This implies that the production function for long-distance telephone service post-merger will be given by Q = x [K + 1/2L], where x > 1 is the productivity factor. Suppose that r = 10 and w = 5, and the pre-merger service quality index is s = 12.

a) Suppose that the long-distance market is a monopoly following the merger between AT&T and Sprint and that x = 5/4. Assume that s remains constant at 12. Should the DOJ allow this merger to proceed? Provide a careful economic analysis in support of your recommendation.(20)

b) Continue to assume that x = 5/4, but the market for long-distance telephone service remains perfectly competitive following the merger. For what values of s will the DOJ approve this merger? (15)

A1. Tikea is an open economy with high capital mobility and a fixed exchange rate against
Euro. Prices are given in the short run. The Tikean government is currently debating a large
cut in the autonomous part of its income taxes to fight the current pandemic.
a) Analyze the effects of such a temporary tax cut graphically and verbally. Explain what
would happen to the following for Tikea: short run equilibrium income, interest rates,
investment, the value of Tikean Lira (consider Tikea as the domestic economy and use ETL/€
for Tikean Lira/Euro exchange rate), the net exports, the level of capital inflows and the
level of foreign exchange reserves at the central bank. Make sure you explain the
mechanism(s) behind your results.
b) How would your answer to part a) change if there is low capital mobility?
c) Now analyze the long run effects of a permanent tax cut (again assume high K-mobility).
You should explain both the short run and long run adjustments of the macroeconomic
aggregates in part a)

Under a fixed exchange rate regime, can a country aain both internal and external
balances using only expenditure-changing policy? Use the related graphical tool and a
verbal explanation. Also, make sure you explain the meanings of “expenditure-changing”
and “expenditure-switching” policies in your answer.

A product has the following demand and supply equations:
Qd=100-3P and Qs=20+2P

a) What is the equilibrium price?
b) What is the equilibrium quantity?

Assume that you work in the beef industry. Beef is a normal good. Consider the following events.
What curve shifts (show the change), and what is the effect on equilibrium price and quantity in the beef industry.

No. 1 Event: A medical society publishes a study that beef contributes to heart disease.
a) What curve shifts (and show this change): __________________
b) Is there an increase or decrease in the price of beef: _______________
c) Is there an increases or decrease in quantity of beef: ______________

No. 2 Event: The price of feed grain, input to your industry, increases.
a) What curve shifts (and show this change): ___________
b) Is there an increase or decrease in the price of beef: _______________
c) Is there an increases or decrease in quantity of beef: ______________

The following information concerns energy drinks sold in a city.
Price Qd (thousand) Qs (thousand)
$1.50 20 0
$2.00 15 6
$2.50 10 10
$3.00 7 13
$3.50 5 15

a) What is the equilibrium price?
b) What is the equilibrium quantity?
c) What is the total revenue at this price and quantity?
d) Calculate the price elasticity of demand for a proposed price change from $3.00 to $3.50.
e) Is the price elasticity of demand elastic, inelastic, or unit elastic in this range?

John secured the bank's $2,000 mortgage to buy a car. After the contract was written it turned out that inflation in the economy was lower than expected. Who gained from this development and who lost? Explain Within 100 words