erinhare45

Perfectly competitive firms are price takers. True or False

As an organization expands its operations into different countries there is an increase in political risk 
as there are more levels of government to deal with and varying government regulations and policies. 
It is important that a company understand the risk that exists in all countries they operate in. 
Critically comment on this statement with the help of examp

Which of the following correctly explain why money is not considered capital in economics?

True or False: Because a monopolist is able to charge a higher price than a perfectly competitive firm, his marginal revenue is higher than what a perfectly competitive firm’s would be.

Calculate the dimensions and maximum volume of a prism that has a surface area of 81cm^?

Identify the economic incentives that motivate private firms to engage in pollution prevention activities.

In the long run, the greater burden of a specific tax will usually be absorbed by

a. consumers

b. the party- consumers or producers- with the more elastic demand/supply curve

c. the party with the least elastic demand/supply curve

d. shareholders and employees of the firm in the form of reduced dividends and wages

e. none of the above

Which is likely to have a greater impact in a *Keynesian* economic model?

A) $100M tax cut

B) $100M increase in Defense Spending

The amount of market power a firm has depends on

A. the closeness of substitutes for its product.
B. how easily consumers can be fooled.
C. how large it is.
D. whether it creates externalities.

Please Explain Answer

The net cash flows from an investment project are -$30,000 in the first year, -$20,000 in the second year, -$6,000 in the third year, $1,500 in the fourth year, $5,000 in the fifth year, $15,500 in the sixth year, and $66,000 in the 7^th year. Compute the NPV of this project at the following interest rates: 2%, 5%, and 8%. Explain why the NPV changes with different interest rates.

A decrease in the price level might cause:

A. an increase in the quantity of aggregate demand because of the substitution effect.

B. an increase in the quantity of aggregate demand because of the wealth effect.

C. a decrease in the quantity of aggregate demand because of the interest rate effect.

D. a decrease in the quantity of aggregate demand because of the multiplier effect.

The terms of trade between the two countries refer to:

a. The amount of good A given up for good B.

b. What price the two countries agree upon for their imports and exports.

c. The rules governing trade between the two countries.

d. The terms set by the World Trade Organization for trade.

Labor costs have been increasing at an annual rate of 10%. A firm wishes to set aside funds to cover labor costs for the next 5 years. Determine how much must be set aside today if the money will be invested and will earn interest at a rate of 10%. The labor cost next year will be $51,040.

Officially, inflation occurs when there is:

A. a one-time increase in the overall price level.

B. a one-time increase in one price for one good.

C. a sustained increase in the general price level.

D. a sustained increase in wages.

Two points (allocation A) and allocation B) are on a single indifference curve. What can we conclude?

What is the value of the monetary base given the value of deposits at all depository institutions equals $2265.83 billion, currency is $1144.60 billion, and bank deposits held at the Fed are $1422.30 billion?

Aggregate demand management policies are designed most directly to:

In a monopolistic competition as well as in monopoly,

Answer:

Suppose demand and supply are given by Q^d=14-0.5P and Q^s=0.25P-1.

a)Determine the equilibrium quantity and price in this market. Show the equilibrium graphically.

b)Suppose a $12 excise tax is imposed on the good. Determine new supply and the new equilibrium quantity and price.

c)How much does producers' revenue change?

d)How much tax revenue does the government earn?

At the 25thanniversary of the Woodstock Festival in 1994, there were many vendors who sold tie-dyed t-shirts. Each vendor was selling these t-shirts for $15 a piece. Which market structure model would best characterize such a situation? Select one:

a. Oligopoly

b. Perfect competition

c. Monopolistic competition

d. Duopoly

e. Monopoly

If nominal output rises from $13.5 billion to $14 billion and the GDP deflator rises from 100 to 105,

What is the percentage increase in nominal output?

What is the percentage increase in the price index?

The law of one price states that the same good manufactured in two different countries should sell for the same price, in the same currency units.

Suppose that the price of U.S. soybeans is currently $6.00 per bushel and the price of European soybeans is currently 4.5 euros per bushel. If the law of one price holds, what is the euro/dollar exchange rate, E (euro/dollar)?

I have

$6=4.5eur

1=4.5eur/$6, = 0.75eur/dollar

This makes since to me but someone is suggesting that the rate is always assumed at 1 euro per dollar amount. So they think the answer is $1.33

Which is correct?

Suppose Simone is an avid reader and buys only comic books. Simone deposits $4,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a comic book is priced at $10.00. Initially, the purchasing power of Simone's $4,000 deposit is____________________ comic books.

The information in the table above shows a nondiscriminating monopolist’s demand schedule. Assume that MC is $220 and MC = ATC at all output levels. What is the monopolist's economic profit? Please do not input the $ sign in the answer box. If your answer is $200, please input 200 for your answer.

Suppose the market demand for pizza is given by Qd = 300 — 20P and the market supply for pizza is given by Qs = 20P — 100, where P = price (per pizza).

a. Graph the supply and demand schedules for pizza using $5 through $15 as the value of P.

b. In equilibrium, how many pizzas would be sold and at what price?

c. What would happen if suppliers set the price of pizza at $15? Explain the market adjustment process.

d. Suppose the price of hamburgers, a substitute for pizza, doubles. This leads to a doubling of the demand for pizza. (At each price, consumers demand twice as much pizza as before.) Write the equation for the new market demand for pizza.

e. Find the new equilibrium price and quantity of pizza.

3. Country A has 1,200 units of labour available. It can produce two goods, apples and bananas. The unit labour requirement in apple production is 3, while in banana production it is 2. Country B has a labour force of 800. B’s unit labour requirement in apple production is 5, while in banana production it is 1. a)Graph Country A’s and B’s production possibility frontier

Suppose the market for copper is represented by Q = 5P² - 200 Q = 1,300 - 10P²

a. Find the market equilibrium price and quantity. (2 marks)

b. Find the price elasticity of demand at the equilibrium. Show your steps. (3 marks)

c. Suppose there is a rise in the supply of copper in the market. Based on your result in (b), explain how the total sales revenue in the copper market will change.

1. If Px= $10, and Py= $20, and consumer's income = $120, find the optimal combination of good X and good Y that will maximize the consumer’s utility.

2. What is the total utility of that combination?

3. If the consumer’s income increases to $150, and prices of goods X and Y are unchanged: a. Find the new optimal quantity of good X and good Y that will maximize the consumer’s utility. b. Calculate the income elasticity of demand for good X, and for good Y, for an income increase from $120 to $150. What can you conclude?

Assuming a bank only keeps enough of its reserves to meet its reserve requirement, how much money is created when a bank receives a deposit from an individual of $80,000 and there is a 10% reserve requirement.

Which best describes the idea behind the "invisible hand"?

a. Producers decide what to make for consumers, which guides the economy.

b. Individuals seeking their own self interest benefit the economy as a whole.

c. Government sets policy for producers and consumers, which guides the economy.

d. Consumers decide what they need and want to buy, which guides the economy.

At the end of the 2nd quarter, the unemployment rate in the U.S. was 6%. The Federal Reserve has stated that it will conduct monetary policy to bring down this unemployment rate during the 3rd quarter. Suppose that the natural rate of unemployment is 6%, the value of a is one, and the public expects an inflation of 3%. According to the given information, which of the answer choices correctly gives values of actual inflation that would support Phillips’s theory and Friedman’s theory, respectively?

1.Phillips: 1%; Friedman: 1%

2.Phillips: 2%; Friedman: 6%

3.Phillips: 4%; Friedman: 3%

4.Phillips: 5%; Friedman: 8%

1- An engineer has a fluctuating future budget for the maintenance of a particular machine. During each of the first 5 years, $1000 per year will be budgeted. During the second 5 years, the annual budget will be $1500 per year. In addition, $3000 will be budgeted for an overhaul of the machine at the end of the fourth year, and another $3000 for an overhaul at the end of the eighth year. The engineer asks you to compute the uniform annual expenditure that would be equivalent to these fluctuating amounts, assuming interest at 8% per year.

Suppose that you also take out a $1,000 loan at the Cavalier Credit Union. The loan agreement stipulates that you must pay it back with 4% interest in one year, and again, the inflation rate is expected to be 2%. 

If the inflation rate turns out to be 3% rather than 2%, who will be hurt by this? Why?

6. What is the present value of the following annuities? a. PhP 3,000 a year for 10 years discounted back to the present at 8% b. PhP 50 a year for 3 years discounted back to the present at 3% c. PhP 280 a year for 8 years discounted back to the present at 7% d. PhP 600 a year for 10 years discounted back to the present at 10%

A survey taker for unemployment statistics filed this report: “There were 65 people in the houses I visited. 10 of them were children under the age of 16; 25 people had full-time jobs and 5 had part-time jobs. There were 10 retirees, 5 full-time homemakers, 5 full-time students over age 16, and 2 people who were disabled and cannot work. The remaining people did not have jobs but all said they would like one. One of these people had not looked actively for work for 3 months, however.” FIND the labor force, the unemployment rate, and the participation rate implied by the survey taker’s report.

When a profit-maximizing firm in a monopolistically competitive market is in long-run equilibrium:

a. the demand curve will be perfectly elastic.

b. price exceeds marginal cost.

c. marginal cost is falling.

d. marginal revenue exceeds marginal cost.

Over the past decade, medical costs have increased more rapidly than other prices. In order to illustrate how rising medical costs have affected consumer alternatives, let X represent the quantity of medical services, and let Y represent the quantity of other goods. Furthermore, let income (M) be measured in hundreds of dollars, the price of medical services and other goods in terms of dollars per minute, with M = 100, Px = 4, and Py = 5.

a. Graph the budget line, and determine the market rate of substitution.

b. Illustrate the budget set.

c. Show in your graph what happens to the budget constraint if Px increases to $10.

d. What is the meaning of the slope of the two budget constraints?

The equilibrium price of coffee mugs rose sharply last month, but the equilibrium quantity was the same as ever. Three people tried to explain this situation. Which explanations could be right? Explain your logic.

Billy: Demand increased, but supply was totally inelastic.

Marian: Supply increased, but so did demand.

Valerie: Supply decreased, but demand was totally inelastic.

Growing Perpetuities Mark Weinstein has been working on advanced technology in laser eye surgery. His technology will be available in the near term. He anticipates his first annual cash flow from the technology to be $210,000, received three years from today. Subsequent annual cash flows will grow at 3 percent, in perpetuity. What is the present value of the technology if the discount rate is 12 percent?

You’re trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $12,120, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $2,316, $2,807, $2,646, and $1,508 over these four years, what is the project’s average accounting return (AAR)?