BRANDEIS UNIVERSITY Department of Economics Economics 10a Mr. Coiner Introduction to Microeconomics Fall‚ 2012 Problem Set 2 1. This question examines the impact of 5 events on the market for large automobiles with relatively low gas mileage and relatively high emission levels (think Hummer). Answer each part separately. For each event‚ indicate which curve (D or S) shifts‚ indicate in which direction (left or right) it shifts‚ and show in a demand-supply diagram in which
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to distinguish our needs by different prices. Also‚ a cow costs $20‚ it is expensive than a chicken that costs $10. As long as money keep its value stable‚ people saving money into purchasing power in the future‚ because money can store of values. 2. State and explain Friedman’s Theory of Inflation. State and explain Fisherian Theory of Interest Rate. Friedman’s theory of inflation is that there is a lot of money chasing too few goods. For example‚ diamonds are dropping their prices to every
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Food and beverages at 15%. These three combined make up 65% of the market basket‚ so majority of the basket includes these three categories. 2. Suppose the market basket of goods and services purchased by an average urban household consists of only X‚ Y‚ Z‚ three consumer products. Calculate the CPIs for each year and the inflation rate for the Year 1-Year 2 period. There are 5 steps to calculate the CPI. The first is to fix the basket. Then‚ you find the prices of the items in your basket. Third
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Classical and Keynesian Economic Theories Economics can be defined as a social science concerned primarily with description and analysis of the production‚ distribution‚ and consumption of goods and services. There are two main schools of thought when it comes to economics: Classical and Keynesian economics. Each theory takes a different approach to the economic study‚ but neither approach is flawless. First‚ looking at the Classical economics theory‚ it is based largely on the thought that free
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The Power of Markets: Who feeds Paris? Two basic assumptions that economists make about individual and firms are that all individuals act in a way to make themselves as well- off as possible. For example‚ individuals make the best use of their utility and skill‚ so they can earn more money. The second assumption is that firms always try to maximize the money they earn. For example‚ if an entrepreneur had two business choices that he could make‚ he would pick the business choice that he thinks
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In a capitalist system such as the one in the US‚ everything is controlled by supply and demand. When there is a scarcity of a specific object/service‚ the demand for it is higher. A savvy businessperson will recognize the demand and will offer the product/service. Major chain stores are included in this system; they recognize a demand and try to fill it. As a simplistic example: town A has no pizza store. Mr. B realizes that people would like to be able to eat in a local pizzeria‚ so he opens
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Economics TOPIC 4: AGGREGATE DEMAND (AD)/ AGGREGATE SUPPLY (AS) MODEL Learning Objectives • Understand AD and AD curve • Discuss factors shifting AD curve • Understand AS and AS curve • Discuss factors shifting AS curve • Understand Macroeconomic equilibrium LO1 Aggregate Demand (AD) • AD refers to the real GDP demanded • • • at each price level. Y = AD = C + I + G + (X – M) There is an inverse relationship between real GDP demanded and the price level. AD curve is downward
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the English words. Therefore‚ this research addresses two questions by taking into account the influence of the learners’ first language on their pronunciation: 1. Does a learner’s L1 influence the pronunciation (phonemes) of his or her L2 (English)? 2. Does the pronunciation differ between the languages? Literature review A research conducted by James (2007) examined the relationship between learner’s interlanguage (IL) and transfer of learning. From this research has come an understanding that different
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then neither player wins. Cooperative oligopoly models are “interdependent oligopoly behavior that assume that firms explicitly or implicitly cooperate with each other to achieve outcomes that benefit all the firms” (Farnham‚ 2010‚ p. 490). 2. a. What is the firm’s Total Revenue? The firm’s Total Revenue is where (A)(E)= (Total Revenue)‚ This is the rectangle made by CAJG. “Total revenue is represented as a rectangle with Price (on the demand curve) as its height‚ and quantity
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