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3;4;5;6 - microeconomics
3. Calculate parameters a and b of the demand function Pso-bQ CZK 12,...
· Inflation (Mankiw Ch. 5 #3). An economy has the following money demand function: (M/Pd =...
· Inflation (Mankiw Ch. 5 #3). An economy has the following money demand function: (M/Pd = .2Y/i1/2) a.) Derive an expression for the velocity of money. What does this velocity depend on? Explain why this dependency may occur. b.) Calculate the velocity if the nominal interest rate i is 4 percent. c.) Assume the nominal interest rate i is still 4 percent. If output Y is 1,000 units and the money supply M is $1,200, what is the price level...
2. Comparative advantage. Adam and Boris run a cafeteria. Adam can prepare 1 hamburger in 60...
2. Comparative advantage. Adam and Boris run a cafeteria. Adam can prepare 1 hamburger in 60 seconds if he works in the kitchen and he can serve 1 customer in 50 seconds whern he works at the checkout. Boris can prepare 1 hamburger in 50 seconds and he can serve 1 customer in 40 seconds. Who has the comparative advantage in which activity? How should they specialize? How many hamburgers they can make and how many customers they can serve...
3. An economy has the following money demand function: (M/P 2Y a. Derive an expression for...
3. An economy has the following money demand function: (M/P 2Y a. Derive an expression for the velocity of money. What does velocity depend on? Explain why this dependency may occur. b. Calculate velocity if the nominal interest rate i is 4 e. If output Y is 1,000 units and the money supply M d. Suppose the announcement of a new head of the percent. is $1,200, what is the price level P? central bank, with a reputation of being...
A demand function for milk has been estimated as P = 60 – 3Q and a...
A demand function for milk has been estimated as P = 60 – 3Q and a supply function for milk has been estimated as P = 5 + 2.5Q. 1. Draw a diagram of this market in competitive autarky equilibrium (without the policy). Label all relevant elements (prices, quantities, supply, and demand). Include the numerical values for the important points in your diagram. Calculate consumer surplus, producer surplus, government expenditure, deadweight loss, and total welfare in this market. (7 marks)...
Question 3: Suppose that the demand equation: P- 10-Q and supply equation: P Q a. Calculate...
Question 3: Suppose that the demand equation: P- 10-Q and supply equation: P Q a. Calculate the equilibrium price and quantity b. Calculate the consumer surplus, producer surplus and total surplus at equilibriunm Suppose the government imposes a tax of $2 for each unit bought. Derive the new equilibrium price that consumers pay, the price that firms receive, and quantity c. d. Calculate the deadweight loss of this tax. e. In a diagram, show the equilibrium in part a and...
Problem 5. Supplement the following graph, assuming that the money demand function (i.e. the demand for...
Problem 5. Supplement the following graph, assuming that the money demand function (i.e. the demand for loans) is given by MD-P( 100-icom), where P is the price level and icom's the market interest rate in percentage points. The nominal interest rate set by the central bank is 5%, the mark- up of the commercial banks is 3 percentage points and the reserve ratio is 10%. The price level equals 2. What is the money supply in equilibrium? What is the...
Microeconomics, Module 9: “Welfare Economics and the Gains from Trade” (Chapter 8) CANAAN WINERY The market...
Microeconomics, Module 9: “Welfare Economics and the Gains from Trade” (Chapter 8) CANAAN WINERY The market for wine has many competitive producers and two types of consumers: residents of Canaan, whose demand curve for flasks of wine is QJ = 10 – P, and residents of Aram, whose demand curve for flasks of wine is QR = 20 – 4P. Quantity is in thousands of flasks of wine; Price is in shekels. In this exercise, the wineries are not able...
1. Suppose that a simple economy produced only three goods: wheat, automobiles, and chairs. The table...
1. Suppose that a simple economy produced only three goods: wheat, automobiles, and chairs. The table below lists the quantity and prices for each of the goods for year 2000 and 2010. Based on table, answer the following questions (7.8 total points): Price in 2000 Wheat Automobiles Chairs Quantity produced in 2000 100 200 400 $5 $40,000 $10 a) Calculate nominal GDP in year 2000. 5 points) b) Suppose prices doubled by 2010 but production stayed the same. Calculate the...
A sand and gravel company sells pea gravel. It faces two types of customer with the following inverse demand curves: Type A: P-3.5-0.0020 Type B: P-3-0.0010 Where Q measures bags of pea gravel an...
A sand and gravel company sells pea gravel. It faces two types of customer with the following inverse demand curves: Type A: P-3.5-0.0020 Type B: P-3-0.0010 Where Q measures bags of pea gravel and P is the price per bag. The marginal cost is $0.50. (a) Suppose the firm wants to use discounting to price-discriminate. Calculate the price per bag and the price per bag with the quantity discount. What minimum quantity will the firm set for the quantity discount?...
Cyclical unemployment results from a a mismatch of skills b being in the wrong geographical location...
Cyclical unemployment results from a a mismatch of skills b being in the wrong geographical location c taking the time to find the best job d seasonal decreases in demand for labor e a recession in the economy 2 ) Frictional unemployment refers to unemployment that results from a a mismatch of skills b being in the wrong geographical location c taking the time to find the best job d seasonal decreases in demand for labor e a recession in...
· Inflation (Mankiw Ch. 5 #3). An economy has the following money demand function: (M/Pd = .2Y/i1/2) a.) Derive an expression for the velocity of money. What does this velocity depend on? Explain why this dependency may occur. b.) Calculate the velocity if the nominal interest rate i is 4 percent. c.) Assume the nominal interest rate i is still 4 percent. If output Y is 1,000 units and the money supply M is $1,200, what is the price level...
2. Comparative advantage. Adam and Boris run a cafeteria. Adam can prepare 1 hamburger in 60 seconds if he works in the kitchen and he can serve 1 customer in 50 seconds whern he works at the checkout. Boris can prepare 1 hamburger in 50 seconds and he can serve 1 customer in 40 seconds. Who has the comparative advantage in which activity? How should they specialize? How many hamburgers they can make and how many customers they can serve...
3. An economy has the following money demand function: (M/P 2Y a. Derive an expression for the velocity of money. What does velocity depend on? Explain why this dependency may occur. b. Calculate velocity if the nominal interest rate i is 4 e. If output Y is 1,000 units and the money supply M d. Suppose the announcement of a new head of the percent. is $1,200, what is the price level P? central bank, with a reputation of being...
A demand function for milk has been estimated as P = 60 – 3Q and a supply function for milk has been estimated as P = 5 + 2.5Q. 1. Draw a diagram of this market in competitive autarky equilibrium (without the policy). Label all relevant elements (prices, quantities, supply, and demand). Include the numerical values for the important points in your diagram. Calculate consumer surplus, producer surplus, government expenditure, deadweight loss, and total welfare in this market. (7 marks)...
Question 3: Suppose that the demand equation: P- 10-Q and supply equation: P Q a. Calculate the equilibrium price and quantity b. Calculate the consumer surplus, producer surplus and total surplus at equilibriunm Suppose the government imposes a tax of $2 for each unit bought. Derive the new equilibrium price that consumers pay, the price that firms receive, and quantity c. d. Calculate the deadweight loss of this tax. e. In a diagram, show the equilibrium in part a and...
Problem 5. Supplement the following graph, assuming that the money demand function (i.e. the demand for loans) is given by MD-P( 100-icom), where P is the price level and icom's the market interest rate in percentage points. The nominal interest rate set by the central bank is 5%, the mark- up of the commercial banks is 3 percentage points and the reserve ratio is 10%. The price level equals 2. What is the money supply in equilibrium? What is the...
1. Suppose that a simple economy produced only three goods: wheat, automobiles, and chairs. The table below lists the quantity and prices for each of the goods for year 2000 and 2010. Based on table, answer the following questions (7.8 total points): Price in 2000 Wheat Automobiles Chairs Quantity produced in 2000 100 200 400 $5 $40,000 $10 a) Calculate nominal GDP in year 2000. 5 points) b) Suppose prices doubled by 2010 but production stayed the same. Calculate the...
A sand and gravel company sells pea gravel. It faces two types of customer with the following inverse demand curves: Type A: P-3.5-0.0020 Type B: P-3-0.0010 Where Q measures bags of pea gravel and P is the price per bag. The marginal cost is $0.50. (a) Suppose the firm wants to use discounting to price-discriminate. Calculate the price per bag and the price per bag with the quantity discount. What minimum quantity will the firm set for the quantity discount?...
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