Present the three marginal equivalencies that are necessary conditions for a general equilibrium. Use a graph to explain these three marginal equivalencies.
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- Explain in detail what are Computable General Equilibria Models?please solve the following econometrics question! Explain the two conditions required for an instrumental variable. Make sure you express both conditions mathematically as well.Suppose, as an economist, you are asked to analyze an issue unlike anything you have ever done before. Also, suppose you do not have a specific model for analyzing that issue. What should you do? Hint: What would a carpenter do in a similar situation?
- Why is having knowledge of graphing and basic algebra or essential for your understanding of macroeconomics and how they are used in the courseConsider now the two-period model in general equilibrium, so that prices, investment, and labor supply are endogenous, i.e. the production economy. Analyze and carefully explain graphically and in words the general equilibrium effects of a decrease in TFP for a benchmark economy with no frictions.Examine the law of variable proportions and show graphically. Which stage is optimum for production and why?
- Give an economic relationship in which individual effect of independent variables are difficult to separate in the presence of multicollinearity.Heckscher-Ohlin Theorem: Suppose Azerbaijan and Georgia produce meat and potatoes. Azerbaijan is capital-abundant than Georgia (Scarce factor in Azerbaijan is land, and in Georgia it is capital). Suppose meat production is relatively more capital-intensive. When the two countries will open up borders and start trading with one another, please indicate in the boxes below, what is likely to happen to the variables after the trade Write + the variable increases; - if the variable decreases; 0 if the variable does not change; A if the direction of change is unknown. VARIABLES AZERBAIJAN GEORGIA The relative price of meat (Pm/Pp) Output of meat Output of potatoes Exports of meat Exports of Potatoes Imports of meat Imports of Potatoes Income of landowners in Azerbaijan Income of capital owners in Georgia WagesYou have just used three of the four variables in the IPAT equation. Now give one example of how the T (technology) variable could potentially increase the total impact of the United States and one example of how it could potentially decrease the U.S. impact.