Economics Answers

Suppose a small regional airport is served by one of the major airlines, and a new low-cost airline enters the market. If the major airline cuts its air fares in this market to levels that are below its marginal cost in response to the other firm's entry, then the major airline may be engaging in

a. parallel conduct.
b. parallel pricing.
c. predatory pricing.
d. unlawful collusion.

Assuming that the MPC=.75 and that prices are constant, which of the following fiscal policies would eliminate a recessionary gap of $60 billion maintaining a balanced budget?
A. Decreasing government spending by $60 billion while raising taxes $80 billion
B. Increasing government spending by $60 billion while reducing taxes $80 billion
C. Increasing government spending by $60 billion while raising taxes $60 billion
D.Decreasing government spending by $60 billion while reducing taxes $60 billion
E. Increasing government spending by $60 billion while raising taxes $80 billion

If the economy is near the full-employment level of output the AD/AS analysis of a change in government spending or taxation will be different from the Keynesian analysis.
T or F

Suppose equilibrium savings equals $750 billion, and equilibrium GDP equals $3,500 billion. Investment spending rises to $900 billion, and equilibrium level of real GDP increases by $500 billion. Assuming everything else remains constant, the value of the spending multiplier is:
A. 2.5
B. 1.8
C. 4.4
D. 4.0
E. 3.3

Suppose the current rate of inflation is about 14% and there is an inflationary gap of $150 billion in the economy. Which of the following policies would be most appropriate to reduce inflation if the marginal propensity to save is equal to 0.05
A. Reduce government spending by $30 billion
B. Reduce government spending by $25 billion
C. Reduce G by $7.5 billion
D. Reduce G by $150 billion
E. Reduce G by $50 billion

Firefighters are highly skilled workers who are typically employed by city governments. If a city reduces the wage rate paid to firefighters to be less than the equilibrium wage rate, what happens to the economic rents earned by the firefighters?

a. increase
b. decrease
c. remain unchanged
d. public employees like firefighters cannot earn economic rents

If the factor supply curve facing a monopolist is the market supply curve, and if the market supply curve is an upward sloping straight line, the marginal expenditure curve

a. lies below the market supply curve.
b. lies above the market supply curve.
c. is the market supply curve.
d. crosses the market supply curve at the market wage rate.
e. Either A or B is possible.

Suppose a labour market has perfectly inelastic supply that is composed of union and non-union workers, and both groups of workers initially earn the perfectly competitive wage. What happens to the equilibrium employment level and wage for union workers if the union exercises its bargaining power?

a. Both increase.
b. Employment increases and wage declines.
c. Wage increases and employment declines.
d. Both decline.

Clem is saving for a car in a bank account that pays 12% interest, compounded monthly. The balance is now $2400. Clem will be saving $120 per month from his salary, and once every four months (starting in 4 months) he adds $200 in dividends from an investment. Bank fees, currently $10 per month, are expected to increase by $1 per month henceforth. How much will Clem have saved in two years?

Hi. I'm trying to figure out how many employees a company needs to add base on the sales volume increased? 40 hours work week.

Sales Revenue=$1,020,000
Current Employees=74
Total hours for the month=13,757
Overtime dollar percentage=26%
Overtime dollar=$63,000

Would you be able to assist me in finding out how many more workers needed based on the above info? I don't know what formula to use?

I was thinking $1,020,000/74=$13,783 per ee / 26% = $53,014 / 160 = $331 / 8 = 41 employee?

Thanks,
Wen

I have a homework on econometrics and its needs the use of stata if anyone if willing to do it. I'm going to send all the files if anyone accept it.

Two important policy goals of the government and the Fed are to keep unemployment and inflation low, while at the same time making sure that GDP is increasing at an average of 3% per year. It is important to have the right mix of policies and that all the variables be timed perfectly.

Part 1: Assume that the country is in a period of high unemployment, interest rates are at almost zero, inflation is about 2% per year, and GDP growth is less than 2% per year.