5. (35 marks) Suppose that an industry is characterized as follows: C = 100 + 2q2 each firm’s total cost function MC = 4q firm’s marginal cost function P = 90 - 2Q industry demand curve MR = 90 - 4Q industry marginal revenue curve d. We derived the following expression for marginal revenue: MR = P + P(1/Ed) where P is price and Ed is price elasticity of demand. Verify that this expression holds at the profit maximizing price when there is only one firm in the industry
How does an autonomous tightening or an easing of monetary policy by the Fed affect the aggregate demand curve?
monetary policy assume the us economy has the following: GDP is 15,600 billion up from 13,400 billion four years ago. unemployment is at 4.0% down from 7.7% three years ago.... inflation is at 3.7% up from 1.2% four years ago.. NRU=4.0% and target inflation is 2.0%........ Explain in detail the problem the country is facing?
Barber shops in a large city would seem to be an example of a competitive markets, since there are many sellers operating relatively small shops, each seller takes the price of haircuts as given, and the products (haircuts) are very similar between different shops.
a. How could you argue that the barber shop market is not competitive?
b. Is it possible that each barber shop could face a demand curve that is not perfectly elastic?
c. How profitable do you expect barber shops to be in the long run?
If population in a country falls while GDP stays the same, the country's
a. per capita GDP falls.
b. real GDP rises.
c. per capita GDP rises.
d. welfare falls.
e. real GDP falls.
The United States is less dependent on trade than most other countries because
A. the United States is a relatively large country.
B. the United States is a "Superpower.".
C. the military power of the United States makes it less dependent on anything.
D. the United States invests in many other countries
E. many countries invest in the United States
From 1959 to 2000,
A. the U.S. economy roughly tripled in size.
B. U.S. imports roughly tripled in size.
C. the share of US Trade in the economy roughly tripled in size.
D. U.S. Imports roughly tripled as compared to U.S. exports.
E. U.S. exports roughly tripled in size.
If government expenditures are $2,400, taxes are a flat 20 percent of Real GDP, current Real GDP is $7,200, and Natural Real GDP is $7,800. The cyclical deficit is ________ and the structural deficit is ________.