Q: What is the exchange rate between dollars and Swiss francsif one dollar is convertible into 1/40 oun...
A: ANS If 1/40 ounce of gold can be converted to $1, then 1 ounce of gold can be converted to $40. Simi...
Q: List and describe thefactors that affectthe money marketand the equilibriuminterest rate
A: The equilibrium in the money market is established when the money supplied by the monetary authority...
Q: What are the advantages and disadvantages of havingthe IMF as an international lender of last resort...
A: The International Monetary Fund is a global organization whose goals are to promote the world trade ...
Q: Suppose a state aims to make it easier for people to purchase school supplies for children by exempt...
A: Sales tax holiday refers to the limited time period where sales tax is reduced or waived off on few ...
Q: During and in the aftermath of the financial crisis of2007–2009, planned investment fell substantial...
A: Planned investment refers to the amount of money that a firm plans to invest in capital and consumer...
Q: If expectations of future short-term interest rates suddenlyfell, what would happen to the slope of ...
A: A yield curve is a graphical representation of the yields of financial securities such as bonds in t...
Q: The present value of a series of $5 at the end of every 5 years, forever, is equal to $20. i. Calcul...
A: The concept used here, provides useful insight to form business expectations and to calculate gains ...
Q: Suppose a capital abundant country, such as Canada, enters into free trade with a natural resource r...
A: An economic entity is said to possess a comparative advantage in the production of a good or service...
Q: An end-of-aisle price promotion changes the price elasticity of a good from −4 to −5. Suppose the no...
A: Elasticity of Goods: It refers to the responsiveness of the quantity demanded of the goods and servi...
Q: How does shielding employees and suppliers from business risk help to improve economic outcomes? Who...
A: The procedure of safeguarding workers from the risk assist/helps an investor to obtain the suppliers...
Q: George has been selling 8,000 T-shirts per month for $8.00. When he increased the price to $9.00, he...
A: Price elasticity of demand is the percentage change in quantity demanded due to 1 % change in price.
Q: Suppose you are the economic advisor of Jackie Brown Company, a perfectly competitive company that i...
A: A perfect competition is a market structure which has the following characteristics: All firms sell...
Q: Assume that a firm can obtain a monopoly the market shown in Figure 1 by lobbying for favorable gove...
A: In a monopoly, the equilibrium establishes at a point that is, when the MC (cost to produce one mor...
Q: William does not feel comfortable with the currentlevel of the European Central Bank’s independence....
A: The central bank of every economy is entitled with the responsibility of ensuring the money supply c...
Q: Interpret the relationships among the current account and thefinancial account in thebalance of paym...
A: The balance of payments indicates the record of payments and receipts between the countries. The bal...
Q: Economic Models? a. are essential representations of the real world b. are used to explain how peopl...
A: Answer: Correct option: (a) Explanation: Economic models are used to find ways in which the economic...
Q: What are the main difficulties encountered by the newlyestablished central banks in transition econo...
A: A transition economy is an economy that is in the phase of conversion from a centrally planned syste...
Q: Refer to Table, If the six people listed in the table are the only consumers in the market and the e...
A: If the equilibrium price is $11 the consumer surplus of each consumers can be calculated as follows.
Q: When interest rates decrease, how might businesses andconsumers change their economic behavior?
A: The interest rate is the rate charged by the lender on the asset lend by them. The asset lend can be...
Q: 1. What are some of the reasons that established firms might resist the adoption of a new technology...
A: Hi, thanks for the question. As per the guidelines we are allowed to attempt the first question. If ...
Q: What are the key ingredients of an economic model, and why are models useful?
A: An economic model represents the quantitative relationship between two or more economic variables vi...
Q: . Go to the St. Louis Federal Reserve FRED database,and find data on the exchange rate of U.S. dolla...
A: a. As per the exchange rate for 2nd August,2013, Real exchange rate = $1.5277/£ * [(£17,865/London m...
Q: Fill in the third blank. Italy is a relatively rich country with per-capita GDP of $28,000. India ...
A: Per capita of the GDP of Italy is $28000, Per capita of the GDP of India is $3500, So in 1st doubli...
Q: How to solve Market Equilibrium?
A: Definition Market equilibrium – A market equilibrium occurs when the demand for a good is equal to...
Q: 40) In the above figure, a negative relationship is demonstrated in which of the graphs? A) Figure A...
A: Relationship of two variables in a graph depends on slope of the line. If graph is upward sloping th...
Q: Hello, I need only answer D to be answered. Thank you
A: Monopolistic Competition is a kind of imperfect market structure where a large number of firms compe...
Q: Look at Figure, which shows the inverse relationship between ticket prices and game attendance at Gi...
A: As per the law of demand, price and quantity demanded are inversely related. If the price rises, the...
Q: Immigration and inflation: Suppose a large number of new immigrants enterthe labor market. Assume th...
A: Whenever new emigrants come into the place, the sudden influence is on necessary products like requi...
Q: Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or butte...
A: Given Total labor = 12 units Labor required to produce 1 gun = 6 units Labor required to produce 1 b...
Q: Explain why dating can be considered a method tosolve the adverse selection problem.
A: Adverse Selection refers to a situation where sellers to the transaction has more knowledge compared...
Q: Recognize thehistorical context ofthe development ofthe central bankingsystem
A: A Central Bank is a symbol of state's sovereignty and stability of the country. It is the institute ...
Q: How does this very short-term nominal interest rate, used only betweenbanks, have the power to shake...
A: The federal funds rate is the interest rate at which commercial banks lend reserve balances to each ...
Q: Demand and supply often shift in the retail market for gasoline. Below are two demand curves and two...
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts fo...
Q: Why was the Federal Reserve System set up withtwelve regional Federal Reserve banks rather than onec...
A: The federal reserve system of the Fed is the central banking system of the United States, comprised ...
Q: What businesses domain the politics of Texas. Solve this early but not copy paste answer.
A: A domain is a high-density office, residential, and retail owned by the center and operated by Endea...
Q: Match each term with the correct definition.private propertyfreedom of enterprisemutually agreeablef...
A: “Hey, since there are multiple subpart questions posted, we will answer first three subpart question...
Q) Suppose that Bill and Ted have the same utility function: U(x,y) = 2xi + 2yi, where xi is is individual i's consumption of good x and yi is individual i's consumption of good y. There are ten units of good x and nine units of good y to distribute between them. Show that a fair allocation will satisfy the condition 4xi + 6yi ≥ 47.
Explain it correctly plz early solve it now.
Step by step
Solved in 2 steps with 4 images
- Below is an edgeworth box of two individuals, Ross and Rosa, in the consumption of two goods, X and Y 1. Consider allocations b-f (meaning points a, b, and f). Which allocations(s)A. are better for Ross than “a” (ignoring Rosa)?B. are better for Rosa than “a” (ignoring Ross)?C. are worse for both Ross and Rosa than “a”?D. are better for both Ross and Rosa than “a”?E. are Pareto superior to “a”?2. Suppose that the initial allocation is point a between Ross and Rosa.A. Discuss how Ross’s condition be made better off without harming Rosa(i.e., Rosa maintains her level of utility).B. Illustrate this in a separate diagram and label point/s as necessary (also,if other point/s will have to be made or incorporated).3. Consider once again that the initial allocation is point a. A. Discuss (very briefly) how point d is reached as a Pareto efficientallocation between Ross and Rosa.B. illustrate this condition in a separate diagram.4. Consider points b, c, d, and e. Now plot the utility…Explain why an economy in which airlines charge different passengers different prices for the same flight will not have exchange efficiency. b. Going back to our two good (Apples, Oranges), two person (Ed, Mary) economy, suppose that at a given allocation, Ed’s MRSAO is 3 and Mary’s MRSAO is 1. Use proof by contradiction to show that this allocation is not exchange efficient. Identify a trade that will increase the utility of Ed and Mary. Explain. Show this graphically (with indifference curves). Going back to our two good (Apples, Oranges), two person (Ed, Mary) economy, suppose that at a given allocation, Ed’s MRSAO is 3 and Mary’s MRSAO is 1. Use proof by contradiction to show that this allocation is not exchange efficient. Identify a trade that will increase the utility of Ed and Mary. Explain. Show this graphically (with indifference curves).Smith and Jones are stranded on a desert island. Each has in her possession some slices of ham (H) and cheese (C). Smith prefers to consume ham and cheese in the fixed proportion of 2 slices of cheese to each slice of ham. Her utility function is given by Us = min(10H, 5C). Jones, on the other hand, regards ham and cheese as substitutes – she is always willing to trade 3 slices of ham for 4 slices of cheese, and her utility function is given by UJ = 4H + 3C. Total endowments are 100 slices of ham and 200 slices of cheese. a. Draw the Edgeworth Box diagram for all possible exchanges in this situation. What is the contract curve for this exchange economy? b. Suppose Smith’s initial endowment is 40 slices of ham and 80 slices of cheese (Jones has the remaining ham and cheese as her initial endowment). What mutually beneficial trades are possible in this economy and what utility levels will Smith and Jones enjoy from such trades? c. Now imagine a new endowment in which Smith has 60 slices…
- Which is the correct answer ? Suppose there are 10 apples and 10 oranges in the economy. Joe is currently consuming 4 apples and 5 oranges, and Jane is consuming 6 apples and 5 oranges. At this allocation, Joe's marginal utility of apples is 3, and his marginal utility of oranges is 5. Jane's marginal utility of apples is 6, and her marginal utility of oranges is 10. The current price of apples is R4 per unit and the current price of oranges is R5 per unit. To reach a competitive equilibrium, the required price adjustment is: A. A decrease in the orange price relative to the apple price. B. A decrease in the apple price relative to the orange price. C. No change in the relative prices. D. An increase in both prices.A consumer has GH¢600 to spend on two commodities, A and B. Commodity A costs GH¢20 per unit and Commodity B costs GH¢30 per unit. Suppose that the utility derived by the consumer from x units of Commodity A, and y Commodity B is given by the Cobb-Douglas utility functionU (x, y) = 10x0.6y0.4a. How many units of each commodity should the consumer buy tomaximize utility?b. Is the budget constraint binding?Consider an economy composed of 16 consumers. Of these, 5 consumers each own one right shoe and 11 consumers each own one left shoe. Shoes are indivisible. Everyone has the same utility function, which is Min(2R, L}, where R and L are, respectively, the quantities of right and left shoes con sumed. A) (10%) Is the status quo (where each individual has his own shoe) Pareto efficient? If so, briefly explain why. If not, provide a Pareto improvement b) (10%) Characterize all Pareto efficient allocations
- Consider the utility functions below of two individuals, A and B, and bundles of goods Q and R. UA=X0.5Y0.5; UB=X+2Y; Bundle Q (10, 10); Bundle R (10, 15). Suppose the total X and total Y available in the economy are both equal to 20. a. If initially both individuals are consuming bundle Q, then a pareto-improvement is possible through reallocation of goods, i.e. individual A gives B some of his good X in exchange for some of individual B’s good Y. (True or False? Explain through mathematical examples).b. Pareto-optimality is achieved if we give individual B Bundle R and the remaining goods X and Y available in the economy is given to individual A. (True or false? Explain through a graphical example)Consider a representative consumer in a two goods economy of x and y. The price of good x is 1 TL and the price of y is 3 TL. This consumer is spending all his income at the basket he is currently consuming, and his marginal rate of substitution (MRS) of x for y is 2. Is he at an optimum? If so, show why. If not, explain how he can achieve an optimum point in order to maximize his utility?If an allocation is Pareto optimal and if indifference curves between the two goods have no kinks, then (Select all that applies) Group of answer choices a. two consumers who consume both goods must have the same MRS between them, but consumers may consume the goods in different ratios. b. two consumers with the same income who consume both goods must have the same MRS, but if their incomes differ, their MRSs may differ. c. any two consumers who consume both goods must consume them in the same ratio. d. for any two consumers who consume both goods, neither will prefer the other consumer’s bundle to his own. e. all consumers receive the bundle that they prefer to any other bundle the economy could produce for them.
- An individual's utility is given by: U (q1, q2) = a(q1)+ b(q2), where a and b are constants. When prices are P1= 4 and P2=1, the individual can only maximize utility by purchasing all good #2. When the prices are P1=3 and P2=1, the individual can only maximize utility by consuming all good #1. Which of the following statements below must be true? A. Goods #1 and #2 are complements B. a < b C. 3 < a/b <4 D. The indifference curves exhibit diminishing MRSSuppose pizza(P) and hamburger(H) are perfect substitutes for Andy. He is always willing to substitute two pizzas for one hamburge(b) The price of pizza is pP = $2 per pizza and the price of hamburger is pH = $2 per hamburger.What is Andy’s optimal consumption bundle if his income level is $30?(c) To promote the sale of pizza, now the owner of the pizza restaurant decides to give out the first two pizzas to every consumer for free, and af- terwards, if the consumer wants more, the consumer will still pay at the price of pP = $2 per pizza. If the price of hamburger and Andy’s income are same as before,draw Andy’s budget line. What is Andy’s optimal con- sumption bundle in this case?(d) Now,to promote the sale of pizza, instead of giving out the first two pizzas for free, the owner of the pizza restaurant decides to lower the price of pizza to $0.8 per pizza. Given price of hamburger and Andy’s income remain the same as before, what is Andy’s optimal consumption budle now? Compare with…Suppose the utility function of the two individuals in the economy is given by UA = 2XA0.5YA0.5 ; UB = XB0.5YB0.5 and X and Y are allocated equally between the two individuals. Compute for XA, YA ,XB ,YB Calculate the MRSXY of each individual Is the allocation efficient? How so?