Multiple choice question on the income of domestic goods and imports.

If an economy saves 13 percent of any increase in income on domestic goods and imports 7 percent, then (all else equal) an increase in exports by $2 billion will cause the equilibrium income to rise by: a) $10 billions b) 1000 billions c) $2 billions d) $2.13 billions e) $25 billion

Economics

Product 7.2 Production function Concepts. Indicate whether each of the following statements is true or false. Explain your answers. A. Decreasing returns to scale and increasing average costs are indicated when Q<1. B. If the marginal product of capital falls as capital usage grows, the returns to capital are decreasin ...continues

Economics

Problem 7.6 Optimal Input Mix. The First National Bank received 3,000 inquiries following the latest advertisement describing its 30-month IRA accounts in the Boston World, a local newspaper. The most recent ad in a similar advertising campaign in Massachusetts Business, a regional business magazine, generated 1,000 inquiries. E ...continues

Economics

Problem 8.8 Multiplant Operation. Appalachia Beverage Company, Inc. is considering alternative proposals for expansion into the Midwest. Alternative # 1: Construct a single plant in Indianapolis, Indiana, with a monthly production capacity of 300,000 cases, a monthly fixed cost of $262,500, and a variable cost of $3.25 per c ...continues

Economics

Questions on cost and production functions

The set of 7 problem are based on the National Income Accounting, and ask for calculation and derivation of of Aggregate Demand (AD), multiplier, equilibrium level of income, IS curve etc.

Solve the following Problem: C = 10 + 0.8(Yd), Yd = Y - T, T = 10, I = 20, and G = 30 Where C is the consumption, Yd is the disposable income, T is the tax, I is the investment and G is government spending. 1- Find mathematically and illustrate graphically the Aggregate Demand (AD) function. ...continues

Problems on IS-LM Curve

The following equations describe an economy: C = C + cYD, 0 0 G = G X = X Q = mY 00 M/P = M/P _ If C=100, ...continues

4 problems that deal with Marginal Rate of Technical Substitution, marginal product, Marginal Revenue Product, returns to scale, optimal level of resource employment

Problem 7.1 Marginal Rate of Technical Substitution. The following production table provides estimates of the maximum amounts of output possible with different combinations of two input factors, X and Y. (Assume that these are just illustrative points on a spectrum of continuous input combinations.) A. Do the two inputs exhibit ...continues

find P* and Y*?

The model with nominal rigidities is: yd = m - p + v, ys = b(p - E[p]) +b(u - a E[u]), w = E[p] + a E[u], a = aàƒ/d+àƒ. And The model without nominal rigidities is: yd = m - p + v, ys = b(1-a)u, w = p + au, a = aàƒ/d+àƒ. Find P* and Y* for model with nominal rigidities?

problemset 1

Economic concepts