Economics Answers

What could be the risks arising out of no interference from the central bank?

Question 4: List and explain various majors (indexes) of human welfare. Compare the Human Development Index (HDI) for major Pacific Island Countries and write critical analysis. ( 5 marks) 

a) How is money supply different in a fixed compared to a flexible exchange rate system? b) Explain why does monetary policy lose autonomy in a fixed exchange rate system ? c) Explain the assumptions of flexible exchange rate and fixed exchange rate. Which is an appropriate system for an small island economy of the Pacific ?

(a)Why is the amount of R&D spending important for growth? How do the appropriability and fertility of research affect the amount of R&D spending? (b) How do each of the policy proposals listed in (i) to (iv) affect the appropriability and fertility of research R&D spending in the long run, and output in the long run? i. An international treaty that ensures that each country’s patents are legally protected all over the world. ii. Tax credits for each dollar of R&D spending. iii. A decrease in funding of government-sponsored conferences between universities and corporations. iv.. The elimination of patents on breakthrough drugs, so the drugs can be sold at low cost as soon as they are available.

Suppose the demand function that firm faces shifted from Qd=100-2p to Qd=80-3p and the supply function has shifted fromQs=50+4p to Qs=80+5pso that find the effect of this change on priceand quantity? and Which of the changes in demand and supply is higher?

Suppose that there are only two goods produced in the economy, Call center services and banking services. Prices (P), quantities (Q) and the number of workers (W) occupied in the production of each good for year 1 and year 2 are given by the following table : Year 1 Year 2 Two products P1 Q1 W1 P2 Q2 W2 Call centre 10 100 50 12 100 50 Banking 10 200 50 12 230 60

 Using year 1 prices, what is real GDP in year 2? What is the growth rate of real GDP?

What is the rate of inflation using the GDP deflator?

 Using year 1 prices, what is real GDP per worker in year 1 and year 2? What is labour productivity growth between year 1 and year 2 for the whole economy?

A monopoly firm faces a demand curve given by the following equation: P =$500 − 10Q, where Q equals quantity sold per day.lts marginal cost curve is MC = $100 per unit. Assume that the firm faces no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is not required to be presented), either way, please provide a brief description of how you arrived at your results.

a) How much will the firm produce?

b) How much will it charge?

c)   Can you determine its profit per day? (Hint: you can; state how much it is.)

d)   Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price?

e) How would the $1,000 per day tax its output per day?

f)   How would the $1,000 per day tax affect its profit per day?

g)   Now suppose a tax of $100 per unit is imposed. How will this affect the firm’s price?

h)   How would a $100 per unit tax affect the firm’s profit maximizing output per day?

i)   How would the $100 per unit tax affect the firms profit per day?

S=-120 + 0.25y investment level is $400 determine the equilibrium level using the savings/investment approach to equilibrium.

"Draw Demand/Supply curves for the following shifts in demand and supply:

Demand shifts but supply does not shift

Supply shifts but demand does not shift

Supply decreases and demand increases

Supply increases and demand increases"

Draw Demand/Supply curves for the following shifts in demand and supply:

Demand shifts but supply does not shift

Supply shifts but demand does not shift

Supply decreases and demand increases

Supply increases and demand increases