Economics Answers

Consider an economy with a flexible exchange rate and high capital mobility. The

government wants to raise income but does not want the exchange rate to change. Use IS/LM

framework to show how it must change its monetary and fiscal policies.

Show how an open market sale affects income and the interest rate when the exchange is

fixed and there is less than perfect capital mobility. How would perfect capital mobility alter

your answer?

1)     Consider a consumer with a utility function U (x, y) =X² + Y², the consumer intends to spend birr 80 on the two goods and price of good X and price of good Y are birr 2 and birr 4, respectively

A.   Calculate the optimum consumers consumption amount of X and Y

B.    Find the maximum utility that consumer obtain from consuming the two goods?

C.     Calculate MRS_xy at equilibrium, and interpret your result

Suppose market of a good x can be illustrated by following two equations.

Deman P= 82-0.07Q

Supply P= 14+0.09Q

a) Calculate the equilibrium and quantity in the market.

b) Suppose a tax of $3 is imposed on the supplier of this market. Calculate the quantity after tax, consumer's price, producer's price and government revenue.

relevance of state amid globalization

1. The Bok Chicken Factory is trying to figure out how to minimize the cost of producing 1200 units of chicken parts. The production function is q = 100L³5 Kº". The wage rate is birr 9 per hour and the rental rate on capital is birr 4 per machine hour.

A. Find the minimum cost of producing 1200 units.

B. Find the maximum output that can be produced for a total cost of birr 720.

Identify and discuss any five causes and indicators of underdevelopment.

Explain any five characteristics of national planning process.

Explain why national panning is both a political and a bureaucratic process.

What is the opportunity cost of a car in Japan? What is the opportunity cost of an airplane in Japan?