Economics Answers

• A coupon bond with a coupon rate of 8% and a face value of $1,000. Coupons
are paid out annually and the bond has 1 year to maturity. The current coupon
has just been paid out. The current price of the bond is $1018.772.
• A zero coupon bond with a face value of $1,000 and 2 years to maturity. The
bond trades at $907.029.
• An annuity that pays $50 every year for the next 3 years. The next payment will
be a year from now and the last payment will be 3 years from now. The annuity
is currently worth $136.967.
All these securities are risk-free. Note that there is no direct borrowing and lending
here, so if you want to borrow (lend) you need to sell (buy) an appropriate bond.
(a) Find the term structure of spot interest rates (i.e., r1, r2 and r3: rates for the
next 1, 2, and 3 years).
(b) Find the term structure of forward interest rates (i.e., rates between years 0 and
1, between years 1 and 2, and between years 2 and 3).

For example I want to calculate national government I have total income(Y) and consumption(C) and have investment(I) also I have import(IM ) but I don't have (G) and (EX)... EXANPLE : If y=1137179925 and c=68439 and I=22783 import=39252 find G? And export

Lonewolf Ltd is the sole manufacturer and supplier of solar panels in the country. As a result of this the CEO claimed in a recent meeting that he can set any price he wishes and sell as many units of his product as he wants at that price. Is this correct? Motivate your answer

When a firm has no market power, how does its demand curve appears?

How can governments play a role in promoting knowledge based industries in which fixed costs are high and marginal costs are close to zero?

Thelma and Louie, Inc., started the year with a balance of retained earnings of $550 million and ended the year with retained earnings of $600 million. The company paid dividends of $40 million to the preferred stockholders and $80 million to common stockholders.

Calculate Thelma and Louie’s net income for the year. (Enter your answer in millions of dollars.)

Net income $

The marginal product becomes negative in the short run. At least one variable remains constant e.g. Capital. How can we prove this through the Cobb Douglas function?

acme can get $5 for each widget it produces. how many workers it will hire if the nominal wage is $38?

A local pizzeria sells 500 large pepperoni pizzas per week at a price of $20 each. Suppose the owner of the pizzeria tells you that the price elasticity of demand for his pizza is -3, and he asks you for advice. He wants to know two things. First, how many pizzas will he sell if he cuts his price by 10%? Second, how will his revenue be affected?

If he cuts his price by 10%, his sales will increase to___ pizzas, and his total revenue will increase to $____

One July, the United States sold aircraft worth $1 billion to China and bought aircraft worth only $19,000 from China. During the same month, however, the United States bought $83 million worth of men’s trousers, slacks, and jeans from China but sold only $8,000 worth of trousers, slacks, and jeans to China. Using what you have learned about how trade is determined by comparative advantage, answer the following questions.
a. Which country has the comparative advantage in aircraft production? In production of trousers, slacks, and jeans?