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2. Imports and ExportsNow we allow for international trade. Use the following information from problem 1: C = 400 + (8/9)*DI I = 300G = 800T = (1/2)*Y. Suppose that exports are constant at X = 300.Let imports be a fraction of real income: M = (1/9) * Y. a. Give intuition for why imports M are positively related to national income Y in the equation above.b. Suppose that national income increases by $1. How much will spending on imports increase (the marginal propensity to import) in this case? c. Compute the equilibrium level of national income under international trade. d. Suppose that government spending increases by $120. i) Compute the new equilibrium national income. ii) Based on your numerical answer to (i), calculate the change in national income from a one dollar increase in government spending. iii) Derive the new fiscal multiplier from an increase in government spending using an algebraic equation. Compare to Problem 2.d.(ii). Compare to Problem 1.c.(v).e. Trade…

6. The multiplier effect Consider a hypothetical economy where there are no taxes and no foreign trade, and households spend $0.75 of each additional dollar they earn and save the remaining $0.25. The marginal propensity to consume (MPC) for this economy is 0.75 ; the marginal propensity to save (MPS) for this economy is 0.25 ; and the multiplier for this economy is 4 Suppose investment spending in this economy increases by $100 billion. The increase in investment will lead to an increase in income, generating an increase in consumption that increases income yet again, and so on. Fill in the following table to show the impact of the change in investment spending on the first two rounds of consumption spending and, eventually, on total output and income. Hint: Be sure to enter a negative sign in front of the number if there is a decrease in consumption. Change in Investment Spending = $100 billion First Change in Consumption = billion Second Change in Consumption = 24 billion Total…

Question 18 In a perfectly free economy, all buyers and sellers are what? A. utility users B. utility creators C. utility maximizers D. utility diminishers Question 19 Which of the following is the term for a situation in which manufacturers sell to firms only if the firms charge a certain price for the goods?   A. retail price maintenance agreements B. bid rigging C. exclusive dealing arrangements D. price discrimination Question 20 An oil company is expanding, but no new oil fields are available. They therefore must resort to the expensive and less-efficient practice of extracting petroleum from oil sands. This is known as __________.   A. the principle of increasing marginal cost B. the principle of gross marginal utility C. the principle of diminishing marginal utility D. the principle of increasing marginal utility Question 21 The undesirable and unintended contamination of the environment because of the manufacture or use of commodities is commonly referred to as __________. A.…

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2. Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to $20,000 and a fixed cost of $10 billion. You are asked to advise the CEO as to what prices and quantities BMW should set for sales in Europe and in the United States. The demand for BMWS in each market is given by: QE = 4,000,000 – 100 PE and Qu = 1,000,000 – 20PU where the subscript E denotes Europe, the subscript U denotes the United States. Assume that BMW can restrict U.S. sales to authorized BMW dealers only. a. What quantity of BMWS should the firm sell in each market, and what should the price be in each market? What should the total profit be? b. If BMW were forced to charge the same price in each market, what would be the quantity sold in each market, the equilibrium price, and the company's profit? c. If BMW can charge each customer his reservation price, what would be the quantity sold in each market, and the company's profit?

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Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost $34 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required 1 Required 2 Per Unit Required 3 Required: 1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 13,000 carburetors from the outside supplier? 2.…

28. What is scarcity? OBalancing unlimited wants with limited resources Balancing trade between different nations OBalancing supply with unemployment levels

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Suppose that BMW can produce any quantity of cars at a constant marginal cost equal in the United States. The demand for BMWS in each market is given by $20,000 and a fixed cost of $10 billion. You are asked advise the CEO as to what prices and quantities BMW should set for sales in Europe and QE = 5,000,000 - 100PE and Qu = 1,500,000 - 20PU where the subscript E denotes Europe, the subscript U denotes the United States. Assume that BMW can restrict U.S. sales to authorized BMW dealers only. a. What quantity of BMWS should the firm sell in each market, and what should the price be in each market? What should the total profit be? (round dollar amounts to the nearest penny and quantities to the nearest integer) In Europe, the equilibrium quantity is 1500000 cars at an equilibrium price of $ 35000. While in the United States, the equilibrium quantity is 550000 cars at an equilibrium price of $ 47500 BMW makes a total profit of $ 27,625,000,000 b. If BMW were forced to charge the same…

Question 05 Square Group, Bangladesh, is currently expanding its international business in Kenya. What happens to the company’s profits if the Bangladeshi Taka (BDT) strengthens? What if the BDT weakens?

QUESTION 13All else equal, suppose Country A has a higher level of economic mobility than Country B, which country would be more likely to have higher economic growth?a.Country Ab.Country Bc.There is no relationship between growth and economic mobilityd.It depends on what percentage of mobility is due to intergenerational mobility QUESTION 14The Lorenz curve shows the relationship between which of the following?a.Income inequality and GDP per capitab.Gini coefficients in one country over timec.The percentage of households and the percentage of income earned by those householdsd.Quintiles of income and average income of each quintile QUESTION 15Suppose a country has two sectors, A and B. Sector A uses more physical capital than B and workers are therefore more productive in sector A than in B. Suppose labor is freely mobile between the two sectors. An efficient allocation of labor requires that in equilibrium:a.sector A pays a higher wage than sector Bb.the marginal product in sector A…

Problem 20-03 (algo) The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative D and for the United States is alternative S.   China Production Possibilities Product A B C D E F Apparel 20,000 16,000 12,000 8,000 4,000 0 Chemicals(tons) 0 8 16 24 32 40   U.S. Production Possibilities Product R S T U V W Apparel 60,000 48,000 36,000 24,0000 12,000 0 Chemicals(tons) 0 12 24 36 48 60     Instructions: Enter your answers as whole numbers.   a. Are comparative-cost conditions such that the two countries should specialize?                  If so, what product should each produce?          China should produce .        The United States should produce .   b. What is the total gain in apparel and chemical output that would result from such specialization?       Apparel:  units       Chemicals:  ton(s)   c. What are the limits of the…

QUESTION 11 Your company Mazengwa Ltd is planning to invest in Malaysia in order to increase shareholder value. It has to choose one of the following mutually exclusive projects. Year Cash Flow (R) Cash Flow (S) $100 000l $45 000 1 $14 500 $36 400 $17 200 $15 880 $20 000 $12 000 $138 600 $17 100 .Using the Net Present Value (NPV) technique, which project would you invest in if your required rate of return is 12%6? For the toolbar, press ALT+F10 (PC).or ALT+FN+F10 (Mac). BIU S 10pt Paragraph Arial Save All Answers Close Window Save All Answers to save oli answers. Click Save and Submit to save and submit. Cli DELL 27°C AQI 66

Question 5: International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in Turkey is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 to shift the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to…

Question 5: International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in Turkey is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 to shift the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to…

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Question 6: International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir has the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in Turkey is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 for the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to remain constant…

which one is correct? QUESTION 32 During the 1980s, the cost of capital for U.S. firms averaged about 3.3 percentage points higher than Japanese firms. During 1990 this disadvantage may have disappeared due to ____.   a. higher exports to the United States   b. higher Japanese stock market   c. higher real interest rates in Japan   d. larger shareholder interest

Question 10: International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in Turkey is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 for the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to remain…