Economics
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"Interest rates were expected to increase by 85% of all consumers $1.49
"Interest rates were expected to increase by 85% of all consumers in the May 2004 survey, more than ever before," said Richard Curtin, the Director of the University of Michigan’s Surveys of Consumers. "More consumers in the May 2004 survey cited th..
"It is often impossible to obtain precise information about the pattern $1.49
"It is often impossible to obtain precise information about the pattern of future revenues, costs, and interest rates. Therefore, the process of economic optimization is futile." Discuss this statement...
"The utility derived from consumption is intangible and unobservable. Therefore, $1.49
"The utility derived from consumption is intangible and unobservable. Therefore, the utility concept has no practical value.” Discuss this statement...
A boyfriend can signal to a girlfriend that he loves her $1.49
A boyfriend can signal to a girlfriend that he loves her by giving an appropriate gift. Do you think saying ‘I love you’ can also serve as a signal? Why or why not?..
A business person reads that the price elasticity of demand for $1.49
A business person reads that the price elasticity of demand for the product they sell is 1.25. If the person wishes to increase revenue, should they increase or reduce price? Explain...
A can of lemonade is priced at €0.75 in Europe and $1.49
A can of lemonade is priced at €0.75 in Europe and 12 pesos in Mexico. What would the peso–euro exchange rate be if purchasing power parity holds? If a monetary expansion caused all prices in Mexico to double, so that lemonade rose to 24 pesos, what ..
A central bank wishes to reduce inflationary expectations by increasing interest $1.49
A central bank wishes to reduce inflationary expectations by increasing interest rates. Use the IS–MP model to analyze the effect on the economy of such a move...
A commercial fisherman charts the following relationship between hours spent and $1.49
A commercial fisherman charts the following relationship between hours spent and the quantity of fish caught per trip. a. What is the marginal product of each hour spent fishing? b. Using these data, graph the fisherman’s production function. Explai..
A company faces two kinds of risk. An idiosyncratic risk is $1.49
A company faces two kinds of risk. An idiosyncratic risk is that a competitor might enter its market and take some of its customers. An aggregate risk is that the economy might enter a recession, reducing sales. Which of these two risks would more li..
A company has an investment project that would cost €10 million $1.49
A company has an investment project that would cost €10 million today and yield a payoff of €15 million in four years. a. Should the firm undertake the project if the interest rate is 11 per cent? 10 per cent? 9 per cent? 8 per cent? b. Can you work ..
A company is considering building a bridge across a river. The $1.49
A company is considering building a bridge across a river. The bridge would cost €2 million to build and nothing to maintain. The following table shows the company’s anticipated demand over the lifetime of the bridge: a. If the company was to build t..
A consumer has an income of €30,000 a year and divides $1.49
A consumer has an income of €30,000 a year and divides this income between buying food and spending on leisure. The average price of a unit of food is €15 and the average price of a unit of leisure is €10. Draw the consumer’s budget constraint and dr..
A consumer has income of €3,000. Wine is priced at €3 $1.49
A consumer has income of €3,000. Wine is priced at €3 a glass and cheese is priced at €6 a kilo. Draw the consumer’s budget constraint. What is the slope of this budget constraint?..
A government announces a decision to increase investment in spending on $1.49
A government announces a decision to increase investment in spending on higher education with the intention of increasing the participation rate in higher education by young people, to 45 per cent (i.e. that 45 per cent of school leavers choose to go..
A government wants to reduce the incidence of anti-social behaviour which $1.49
A government wants to reduce the incidence of anti-social behaviour which can result from excess alcohol consumption by young people aged between 18 and 25. Which do you think leads to a fairer market outcome: a specific tax on every unit of alcohol ..