The Hull Petroleum Company and Inverted V are retail gasoline franchises that compete in a local market to sell gasoline to consumers. Hull and Inverted V are located across the street from each other and can observe the prices posted on each other’s marquees. Demand for gasoline in this market is Q= 60 -10P,and both franchises obtain gasoline from their supplier at $2.80 per gallon. On the day that both franchises opened for business, each owner was observed changing the price of gasoline advertised on its marquee more than 10 times; the owner of Hull lowered its price to slightly undercut Inverted V’s price, and the owner of Inverted V lowered its advertised price to beat Hull’s price. Since then, prices appear to have stabilized. Under current conditions, how many gallons of gasoline are sold in the market, and at what price
efine and give an example of a common resource. Without government intervention, will people use common resources too much or too little? Why?
A two-person economy: The Mechanic repairs the farmer’s tractor for $200. The farmer grows wheat, which he sells to a Mechanic for $100. The mechanic buys a dog from the farmer for $50.
a. What is the total GDP of the two-person economy as described above assuming all goods and services were final? Calculate and explain (show all work and explain in detail)
b. What is the total money supply? Calculate and explain (show all work and explainin detail)
c. What is the velocity of money? Calculate and explain (show all work and explain in detail)
In an effort to stimulate the economy in 1976, President Ford asked Congress for a
$20 billion tax cut in combination with a $20 billion cut in government purchases.
Do you consider this a good policy proposal? Why or why not?
The gravity model offers a logical explanation for the fact that
A) trade between Asia and the U.S. has grown faster than NAFTA trade.
B) trade in services has grown faster than trade in goods.
C) trade in manufactures has grown faster than in agricultural products.
D) Intra-European Union trade exceeds international trade by the European Union.
E) the U.S. trades more with Western Europe than it does with Canada
Approximately what percent of all world production of goods and services is exported to other countries?
A) 10%B) 30%C) 50%D) 100%
Orginal Phillips curve is negative relation between unemployment and inflation first observed in uk
Original Phillips curve relation has proved to be very stable across contries and over time
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