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30 Nov
2020

True or False Economics Question A small business that takes a government loan designed…

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True or False Economics Question A small business that takes a government loan designed to help it stay open during the pandemic bears the interest cost of the loan, while a similar small business that uses its owner’s funds for a similar purpose bears no similar costs for it to stay open.
1. Consider the following information for a consumer who is trying to allocate her income between goods X and Y
1. Consider the following information for a consumer who is trying to allocate her income between goods X and Y so as to maximize utility. The price of X is $2 and the price of Y is $1 per unit. When all income is spent, the marginal utility of the last unit of X is 20 and the marginal utility of the last unit of Y is 16. a) Why is the consumer not in equilibrium?b) To increase utility, which good should this consumer consume more of and which less of?2. What two conditions are met when a consumer in maximizing utility?
4.1 According to the following table, which country is relatively more labor-abundant? Explain your answer. Which country is relatively morecapital-abundant?
4.1 According to the following table, which country is relatively more labor-abundant? Explain your answer. Which country is relatively morecapital-abundant? Japan IndonesiaCapital 10 machines 30 machinesLabor 20 workers 50 workers4.2 Suppose that Japan and Indonesia have the factor endowments in the preceding table. Suppose further that the production requirements for a laptop computer are 5 machines and 10 workers, and the requirements for a unit of cloth are 2 machines and 5 workers. a. Which good, computer or cloth, is relatively capital-intensive? Laborintensive?Explain your answer.b. Which country would export cloth? Why?4.3 Suppose that before trade takes place, Japan is at a point on its PPC where it produces 15 laptop computers and 10 units of cloth. Once trade becomes possible, the price of a laptop computer is 5 units of cloth. In response, Japan moves along its PPC to a new point where it produces 20 computers and 10 units of cloth. Is the country better off? How do you know?4.4 Given the information in Study Questions 4.1 and 4.2, explain what happens to the relative prices of goods after trade begins. What about thegains from trade?4.5 Suppose that there are three factors: capital, labor, and land. Bread requires inputs of land and labor, and steel requires capital and labor.a. Which factors are variable, and which are specific?b. Suppose Canada’s endowments are 10 capital and 100 land and the United States’ are 50 capital and 100 land. Which good does each countryexport?c. How does trade affect the returns to land, labor, and capital in the United States and in Canada?4.6 Describe the changes in production requirements and location of production that take place over the three phases of the product cycle.4.7 Does intrafirm trade contradict the theory of comparative advantage? Why or why not?4.8 General Motors is a U.S.-based multinational, but it is also one of the largest car manufacturers in Europe and South America. How mightDunning’s OLI theory explain the trade-offs GM faced as it decided whether to export to those two markets or to produce in them?4.9 Many domestically owned apparel manufacturers buy their garments overseas, sew their labels into them, and then sell them abroad or backinto the home market. What are some of the considerations that a clothing manufacturer might go through to choose this strategy instead of producing at home and exporting?4.10 Suppose Spain were to open its borders to the large number of unskilled Africans seeking to immigrate. In general, what effects would you expect to see in Spain’s trade patterns and its comparative advantage?
Please look at the following regression table. The year is 2010. The data originates from the Penn World Table 9.0,
Please look at the following regression table. The year is 2010. The data originates from the Penn World Table 9.0, from Harris et.al. 2014 from the World Bank and from the International Energy Agency. The variables are defined as follows: Lntran_pc = log of transportation energy consumption per capita (ktoe)Lnypcpenn =log of GDP per capita (USD) Ln_gasprice = log of pump price for gasoline (USD/liter) Ln_temperature = log of the average annual temperature (in C)Ln_annualprecip= log of annual precipitation (mm)Ln_land = log of the land area of a country OECD = a dummy (indicator) that takes on the value of 1 if the country is OECD member, zero otherwise. QUESTION 1Interpret the following coefficients: lnypcpenn, ln_gaspricem, ln_annualprecip, OECD using full sentences and interpret all p values.(3*4 =12 marks) QUESTION 2Please define (Gauss Markov) MLR 4, state if it is likely to hold or not in this case.(2 marks) QUESTION 3Please define (Gauss Markov) MLR 5, state if it is likely to hold or not in this case, and how you can test this assumption. (1 1 1= 3 marks) QUESTION 4Explain what non-nested models are and give an example of a non-nested alternative model to the specification [table] above. (3 marks)
Consider an 7% coupon bond with 2 years time-to-maturity and $1000 face value, is selling for $980 and making annual
Economics Assignment Writing ServiceConsider an 7% coupon bond with 2 years time-to-maturity and $1000 face value, is selling for $980 and making annual coupon payments. The constant market reinvesting rates in the next 2 years is 8%. Based on the above information to answer part (a). (a) Compute the total future value of your investment and realized yield if we consider reinvestment of bond’s coupon payment. Now, based on the below information to answer (b) and (c). The term structure for zero coupon bonds is given as following: Maturity (Years): 1 2 3 YTM: 7% 6% 8%Consider that government is planning to issue a 3-year maturity coupon bond, paying annual coupon payments with a coupon rate of 10%. Its face value is $1000.(b) Assume there is no arbitrage in the market. What should the bond price be without violating the no-arbitrage condition?(c) Under the liquidity preference theory, suppose the liquidity premium is 2%. The bondholder plans to sell the bond at the beginning of the third year, what would be the expected selling price? Hint: what is the value of E(r3)?
10 percent of customers visiting a convenience store are interested in purchasing bubble gum. Each of those customers who are
10 percent of customers visiting a convenience store are interested in purchasing bubble gum. Each of those customers who are interested has the demand given by P = 20 – 4Q, or Q = 5 – 0.25P, where P is in cents and Q is in individually wrapped pieces of bubble gum.a. (2.5 pts) In the space below, choose an appropriate scale and plot the demand of a representative consumer. (If this task gives you trouble, just sketch a straight line and use it in answering the questions that follow.)b. (2 pts) The marginal cost of supplying each piece of bubble gum is 4 cents. Plot the marginal cost on the same graph below.**Graph appears here within review**c. (2 pts) According to the information presented above, what is the optimal number of pieces of gum to put into a pack? d. (2 pts) What price for such a pack of gum would maximize the store’s profit?e. (2 pts) If the marginal cost of each piece of gum increases to, say, 8 cents, then what will happen to the optimal size of a pack (measured in the number of pieces) and the price of the pack? State as much as you can.f. (2.5 pts) Will the company do better if it sells the gum pieces individually rather than in a pack? Yes or no? Provide your reasoning.
Cho enjoys consuming both soda and coffee. Each can of soda costsPS=$1PS=$1, and each cup of coffee costs PC=$2PC= $2.
Cho enjoys consuming both soda and coffee. Each can of soda costsPS=$1PS=$1, and each cup of coffee costs PC=$2PC= $2. Suppose that Cho buys 75 cans of soda and 50 cups of coffee per month. The following graphs show her marginal utility curves for soda and coffee. At her current consumption level, Cho’s marginal utility from consuming the last can of soda she bought is MUS=12MUS=12 utils per can, and her marginal utility from consuming the last cup of coffee she bought is MUC=12MUC=12 utils per cup.025507510012515024201612840MU OF SODA (Utils per can)SODA (Cans per month)025507510012515024201612840MU OF COFFEE (Utils per cup)COFFEE (Cups per month)Is Cho currently maximizing her utility?No; she could buy more coffee and less soda, not spend any more money, and be better off.No; she could buy less coffee and more soda, not spend any more money, and be better off.No; she likes coffee and soda more than other goods, so she should buy more of both.Yes; the marginal utility she receives from her last can of soda equals that of her last cup of coffee. For each of the following combinations of soda and coffee, calculate the marginal utility per dollar from the last can of soda and the last cup of coffee. Then, use the dropdown menus in the last column to indicate which of the combinations satisfy the condition for consumer equilibrium. CombinationSodaCoffeeConsumer Equilibrium?(Cans per Month)MUSPSMUSPS(Cups per Month)MUCPCMUCPCA100100 B7550 C125100 D2525 Suppose Cho has a “caffeine budget” of $395 per month, which she spends on soda and coffee. To maximize her utility, Cho will purchasecans of soda andcups of coffee per month.
Under a flexible exchange rate​ system, if the quantity supplied of dollars is greater than the quantity demanded of​ dollars,
Under a flexible exchange rate​ system, if the quantity supplied of dollars is greater than the quantity demanded of​ dollars, there is​ a: A.balance of payments surplus and the dollar would depreciate. B.balance of payments surplus and the dollar would appreciate. C.balance of payments deficit and the dollar would depreciate. D.balance of payments deficit and the dollar would appreciate.
Consider the following table that contains an economy’s aggregate demand (AD) and short run aggregate supply (SAS) schedules.Price level AD
Consider the following table that contains an economy’s aggregate demand (AD) and short run aggregate supply (SAS) schedules.Price level AD ($billion) SAS ($billion)100 1000 850110 950 950120 900 1050130 850 1200140 800 1250A. State the short run macroeconomic equilibrium and explain why this is an equilibrium. If potential GDP for this economy is $1,050 billion, is there an inflationary or recessionary gap, and how large is it? B. Consider, once again, the AD and SAS schedules from Question ASay real GDP supplied falls by $150 billion at every price level. Determine the new SAS schedule and identify the new short run macroeconomic equilibrium. Name one possible reason for SAS falling.
In 1992, several European countries had their individual currencies pegged to the ECU (a precursor to the euro) in anticipation
In 1992, several European countries had their individual currencies pegged to the ECU (a precursor to the euro) in anticipation of forming a common currency area. In practice, this meant that countries were pegged to the German deutschmark (DM). This question considers how di§erent countries responded to the European Exchange Rate Mechanism (ERM) Crisis. For the following questions, you need only consider short-run e§ects. Also, treat Germany as the foreign country. (a) Following the economic consequences of German reuniÖcation in 1990, the Bundesbank (Germanyís central bank) raised its interest rate. On September 14, 1992, Great Britain decided to áoat the British pound (£ ) against the DM. Using the FX and money market diagrams and treating Britain as the home country, illustrate the e§ects of Germany increasing its interest rate. (10 points) (b) After Britain abandoned the ERM (i.e. allowed its currency to áoat against the DM), investors grew concerned that France would no longer be able to maintain its currency peg. The Banque de France (Franceís central bank) wanted to keep its currency (French franc, FF) pegged to the DM. Using the FX and money market diagrams and treating France as the home country, illustrate the e§ects of Germany increasing its interest rate, assuming the currency peg is maintained. (10 points) (c) Denmark had a similar experience to that of Britain and France. Suppose Denmarkís prime minister approaches you about how to respond. He doesnít want to give up monetary policy autonomy, but wants to maintain the exchange rate peg. Is this possible?

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