Economics

1. Suppose that John’s wage-schooling locus is given by the equation: Wage = 2

1. Suppose that John’s wage-schooling locus is given by the equation: Wage = 2 ·K ·S 1/2 where K = 5.25 and S is quarters of schooling after the 8 th grade. It can be shown that…

1. Suppose that MU x / Px exceeds MU y / Py . To maximize utility the consumer w

1.   Suppose that MUx/Px exceeds MUy/Py .  To maximize utility the consumer who is          spending all her money income should buy:       A.   Less of X only if its price rises.…

1. Suppose that Tonya plans to open a new restaurant. She is required to pay a n

1.      Suppose that Tonya plans to open a new restaurant. She is required to pay a non-refundable ABC deposit to sell alcohol, which costs her $5,000. She needs to buy tables and…

1. Suppose that Toronto and North York are two adjacent municipalities. North Yo

1. Suppose that Toronto and North York are two adjacent municipalities. North York provides luxurious, high-cost services for its residents; Toronto provides minimal low-cost serv…

1. Suppose that a $3.00 tax per pack is imposed on cigarettes. Which of the foll

1. Suppose that a $3.00 tax per pack is imposed on cigarettes. Which of the following is consistent with the demand being relatively inelastic and the supply being relatively elas…

1. Suppose that a 10% increase in the wage results in a 5% reduction in employme

1. Suppose that a 10% increase in the wage results in a 5% reduction in employment. In this case, labor demand is said to be: A. elastic B. inelastic C. unit elastic 2. Which of t…

1. Suppose that a U.S. firm converts dollars into pounds in order to invest in a

1. Suppose that a U.S. firm converts dollars into pounds in order to invest in a British enterprise in the U.K. A year later, the return on the investment is 12 percent in terms o…

1. Suppose that a drug for treating cancer is cleared by the Food and Drug Admin

1. Suppose that a drug for treating cancer is cleared by the Food and Drug Administration and that the company is successful in obtaining a patent for its product. Which of the fo…

1. Suppose that a firm has the production function Q(K, L) - KL, with MPL - K an

1. Suppose that a firm has the production function Q(K, L) - KL, with MPL - K and MPK - L. Furthermore, suppose that, in the short run, the firm's level of capital is fixed at K-5…

1. Suppose that a firm holds a monopoly on a good X. The firm can produce X at a

1. Suppose that a firm holds a monopoly on a good X. The firm can produce X at a constant marginal cost of 20. Men and women have different demand curves for this product. pw = 10…

1. Suppose that a market is described by the following supply and demand equatio

1. Suppose that a market is described by the following supply and demand equations: Qs = 3P Qd =400?P (a) Solve for the equilibrium price and the equilibrium quantity. (b) Suppose…

1. Suppose that a monopolist firm’s demand curve is given by P = 210 4y and it f

1. Suppose that a monopolist firm’s demand curve is given by P = 210 4y and it faces a constant marginal cost of $10. Answer the following questions: a. What is the profit-maximiz…

1. Suppose that a monopolist is producing at an output where its average total c

1. Suppose that a monopolist is producing at an output where its average total cost of production is minimized and equals $50. If marginal revenue equals $60, is the monopoly prod…

1. Suppose that a monopolistically competitive firm must build a production faci

1. Suppose that a monopolistically competitive firm must build a production facility in order to produce a product. The fixed cost of this facility is FC = $24. Also, the firm has…

1. Suppose that a statistically discriminating firm offers new employees a wage

1. Suppose that a statistically discriminating firm offers new employees a wage that is based on the combination of their individual score on a test(7) and the average score on th…

1. Suppose that a tariff is imposed on imports of minivans. Show graphically wha

1. Suppose that a tariff is imposed on imports of minivans. Show graphically what the effect is in terms of price and quantity of imports. Be sure that your graph is completely an…

1. Suppose that an economy has a real GDP of $60000 with autonomous consumption

1. Suppose that an economy has a real GDP of $60000 with autonomous consumption of $7000. If the marginal proposensity to consume (MPC) is 0.80, what would be the total consumptio…

1. Suppose that an individual has a utility function U(c, h) = ln(c) + h (c repr

1. Suppose that an individual has a utility function U(c, h) = ln(c) + h (c represents consumption of a necessity good such as shelter, and h represents health). a. Find that opti…

1. Suppose that consumer is spending all his income on goods A and B. The price

1. Suppose that consumer is spending all his income on goods A and B. The price per unit of good A is 8 euros and the price per unit of good B is 4 euros. Consumer’s income is 100…

1. Suppose that ex is the exchange rate between the U.S. dollar and the Chinese

1. Suppose that ex is the exchange rate between the U.S. dollar and the Chinese yuan in that ex indicates the number of yuan that can be purchased with one dollar. The demand for …

1. Suppose that goods A and B are close substitutes. If the price of good A decr

1. Suppose that goods A and B are close substitutes. If the price of good A decreases, then we would expect an increase in the demand for A and an increase in the quantity of B de…

1. Suppose that in a given year, inflation in the US is 4 percent and inflation

1. Suppose that in a given year, inflation in the US is 4 percent and inflation in Canada is 1 percent. If there is no change in the nominal exchange rate between Canada and the U…

1. Suppose that investment spending decreases by 228 billion. If the marginal pr

1. Suppose that investment spending decreases by 228 billion. If the marginal propensity to consume is 0.4, then what is the change in GDP? 2. If the tax multiplier is -0.6 and a …

1. Suppose that one euro costs 90 cents on January 1. Suppose that on March 1, o

1. Suppose that one euro costs 90 cents on January 1. Suppose that on March 1, one euro costs 85 cents. Circle the correct answers and fill in the blanks: a. The euro has apprecia…

1. Suppose that the Fed is required to keep the inflation rate between 1 percent

1. Suppose that the Fed is required to keep the inflation rate between 1 percent and 2 percent a year but with no requirement to keep trend inflation at the midpoint of this range…

1. Suppose that the United States and Canada have the factor endowments in the f

1. Suppose that the United States and Canada have the factor endowments in the following table. Suppose further that the production requirements for a unit of steel are 2 machines…

1. Suppose that the United States fixes the dollar-pound exchange rate. In the p

1. Suppose that the United States fixes the dollar-pound exchange rate. In the process of maintaining the fixed exchange rate, the U.S. central bank regularly finds itself in a po…

1. Suppose that the behavior of households and firms in an economy is determined

1. Suppose that the behavior of households and firms in an economy is determined by the following equations C=200+0.75Yd, II = 30, G=50, T= 80, TR= 40. The full employment level o…

1. Suppose that the current exchange rate of British pounds for $ is 2£ to 1$. S

1. Suppose that the current exchange rate of British pounds for $ is 2£ to 1$. Suppose that the rate was 2.5£ to 1$ last week. Has the $ appreciated or depreciated with respect to…

1. Suppose that the demand for broccoli is given by Q = 1, 000 – 5P, where Q is

1. Suppose that the demand for broccoli is given by Q = 1, 000 – 5P, where Q is quantity per year measured in hundreds of bushels and P is price in dollars per hundred bushels. Th…

1. Suppose that the demand function for cups of coffee at a local cafe in London

1. Suppose that the demand function for cups of coffee at a local cafe in London is as follows: QD = 600 + 7F – 0.5J + 1.9G. Which one of the following statements is most true? A.…

1. Suppose that the distribution of sales within an industry is as shown in the

1.       Suppose that the distribution of sales within an industry is as shown in the table.                                              Firm                Share   of Total Mark…

1. Suppose that the distribution of sales within an industry is as shown in the

1.       Suppose that the distribution of sales within an industry is as shown in the table. Firm                Share   of Total Market Sales A 25 B 20 C 15 D 14 E 8 F 6 G 5 H 5 …

1. Suppose that the domestic lean hog industry can be characterized by the follo

1. Suppose that the domestic lean hog industry can be characterized by the following equations. QUSSupplied = ?33(3)+ 1(1)PriceUS QUSDemanded = 67 + ?1(1)PriceUS Suppose furthe…

1. Suppose that the economy can be described by the following equations: C-200+

1. Suppose that the economy can be described by the following equations: C-200+ (8/9)*DI I- 500 G = 800 (X-M)-0 a. If national income (Y) increased by $1, by how much would consum…

1. Suppose that the economy consists of four individuals, A, B, and C and D and

1.Suppose that the economy consists of four individuals, A, B, and C and D and that there are three projects being considered. The net benefits, measured in dollars, received by t…

1. Suppose that the editors of Time and Newsweek are trying to decide upon their

1. Suppose that the editors of Time and Newsweek are trying to decide upon their cover story for the week. There were two major news developments: The leaking of a clandestine CIA…

1. Suppose that the federal government had a debt of $9.0 trillion at the beginn

1. Suppose that the federal government had a debt of $9.0 trillion at the beginning of 2006 and a debt of $9.3 trillion by the end of 2007. In 2006, the government spent $450 bill…

1. Suppose that the government of Lumpland is enjoying a fat budget surplus with

1. Suppose that the government of Lumpland is enjoying a fat budget surplus with fixed government expenditures of G = 150 and T = 200. Assume that consumers of Lumpland behave as …

1. Suppose that the level of GDP increased by $100 billion in a private closed e

1.      Suppose that the level of GDP increased by $100 billion in a private closed economy where the marginal propensity to consume is 0.5. Aggregate expenditures must have incre…

1. Suppose that the nominal interest rate increases while the expected inflation

1. Suppose that the nominal interest rate increases while the expected inflation rate rises. Given this information, we know with certainty that the real interest rate A) will not…

1. Suppose that the overall size of the population is 50,000. Of these 50,000, 2

1. Suppose that the overall size of the population is 50,000. Of these 50,000, 27,000 are employed, 3,000 are unemployed 20,000 are not in the labor force. What is the unemploymen…

1. Suppose that the total utility from consuming one unit of good X is 54 utils,

1. Suppose that the total utility from consuming one unit of good X is 54 utils, the total utility of two units of good X is 74 utils, and the total utility of three units of good…

1. Suppose that the wage distribution for Riverside is given below: a. Compute t

1. Suppose that the wage distribution for Riverside is given below: a. Compute the level of wage inequality for the town using the 90th / 10th percentile ratio and the 90th / 50th…

1. Suppose that there is a recessionary gap. Discuss one fiscal policy action th

1. Suppose that there is a recessionary gap. Discuss one fiscal policy action that might eliminate it. Show how the action taken will bring about the desired result? 2. Define the…

1. Suppose that there is a tax of $1 per unit, and the elasticity of supply is 3

1. Suppose that there is a tax of $1 per unit, and the elasticity of supply is 3 and the elasticity of demand is 2 (in absolute value). How much of the $1 tax is paid by sellers? …

1. Suppose that there is a tax of $1 per unit, and the elasticity of supply is 3

1. Suppose that there is a tax of $1 per unit, and the elasticity of supply is 3 and the elasticity of demand is 2 (in absolute value). How much of the $1 tax is paid by sellers? …

1. Suppose that two players are playing the following game. Player A can choose

1. Suppose that two players are playing the following game. Player A can choose either Top or Bottom, and Player B can choose either Left or Right. The payoffs are given in the fo…

1. Suppose that you are a monopolist selling widgets. You face costs of C(Q) = 1

1. Suppose that you are a monopolist selling widgets. You face costs of C(Q) = 10 + 2Q. Suppose that there are two types of consumers that buy your widgets. Group 1 has demand: Q1…

1. Suppose that you are asked to conduct a CEA of an experimental treatment for

1. Suppose that you are asked to conduct a CEA of an experimental treatment for Zika: Without treatment, the average patient’s life-expectancy is 0.5 QALYs. With treatment, the av…