Economics Answers

Discuss the extent to which fiscal policy rather than monetary policy is a better way to cause economic growth?

. 1. Explain how the world price of coffee might be expected to change by the end of
2013??

P↑= S↑, P↓= S↓ (+)
D= ↑, S= ↓
P ↓ = D ↑, P ↑ = D ↓ (-)
can you explain this one.

A. Show what will happen if the government uses some fiscal policy to respond to the high unemployment rate but, due to the lags, does so only after the economy has returned to long-run equilibrium on its own. Be sure to show both the short-run and long-run effects of the fiscal policy. (3 points)

You have to determine the optimal number of trucks that the company should buy in order to use them in their projects. Let denote "Y" as the number of trucks. The Marignal Benefit to the company is given by the expression: MB = 80,000 - Y.
The Marginal Cost given by the expression: MC = 10,000 + (1/2,000)Y2

a. Please calculate the optimal amount of trucks that this company should buy and include a diagram.

b. Provide some reasons that might explain the slopes of the marginal benefit and marginal cost curves.

c. Assume that marginal cost is LOWER than marginal benefit, should more trucks be bought? Illustrate.

Which of the following is/are classified as production in economics?
(1) A boy making an aeroplane model for himself
(2) A mother cooking fish for her family
(3) A waiter serving customers in a restaurant

Gomez runs a small pottery firm. He hires one helper at $10,500 per year, pays annual rent of $4,500 for his shop, and spends $19,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $5,000 per year if alternatively invested. He has been offered $21,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $71,000.



a. Calculate the accounting profit for Gomez’s pottery firm.

TC=50+10Q+0.04Q^2
MC=10+0.08Q
TR=40+20Q+0.02Q^2
MR=20+0.04Q

1) Find the quantity that the firm produces

2)Find the price at which the firm produces

3)Find the total cost,total variable cost and total fixed cost

4) how much does the firm need to earn to avoid from closing its operations

2. Apply your knowledge of the AD/AS model to predict the effect on economic variables (i.e., P, RGDP, interest rates, wages, savings and spending) of some events on the U.S. economy. Diagram the effect of the following events. Be sure to explain the effects in the short run and effects in the long run for each question, in words. To keep things clear, assume that in each case the economy starts out at long-run equilibrium.

b. Tensions in South America dramatically increase the price of coffee. For the sake of argument, suppose coffee is an important input in many industries, including computer programming, transportation, and financial services.

2. Apply your knowledge of the AD/AS model to predict the effect on economic variables (i.e., P, RGDP, interest rates, wages, savings and spending) of some events on the U.S. economy. Diagram the effect of the following events. Be sure to explain the effects in the short run and effects in the long run for each question, in words. To keep things clear, assume that in each case the economy starts out at long-run equilibrium.
a. Labor unions become better organized, and this allows them to drive up wages in the short run in the U.S.
Answer:

Explain the process through which an economy returns to long-run equilibrium in the
AD/AS model when output is above full employment.

Explain the process through which an economy returns to long-run equilibrium in the AD/AS model when output is below full employment