Consider the effects of inflation in an economy composed of only two people: Jake, a bean farmer, and Latasha, a rice farmer. Jake and Latasha both always consume equal amounts of rice and beans. In 2016 the price of beans was $5, and the price of rice was $3.

Suppose that in 2017 the price of beans was $10 and the price of rice was $6.

Inflation was ____________%.

Indicate whether Jake and Latasha were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017 the price of beans was $7.50 and the price of rice was $6.

In this case, inflation was ___________%.

Indicate whether Jake and Latasha were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017, the price of beans was $1.50 and the price of rice was $6.

In this case, inflation was_______%.

Indicate whether Jake and Latasha were better off, worse off, or unaffected by the changes in prices.

What matters more to Jake and Latasha?

a. The relative price of rice and beans

b. The overall inflation rate

What were the trade barriers in the 1990s?

What were the pros and cons of these barriers?

Elasticity of demand curve 1 = - 0.5

Elasticity of demand curve 2 = - 2.5

Elasticity of demand curve 3 = - 0.2

Which of the following provides the greatest moral hazard potential?

Group of answer choices

all provides identical levels of moral hazard

D2

D3

D1

Based on this data calculate:

a) M1 +

b) M2

c) M3

d) M2+

What kind of firm strategy do companies have in the drone industry?

1.)  Economies of scale refer to

A.) the minimum point on the short-run average total cost curve

B.) the flat portion of the long-run average total cost curve.

C.) a decrease in the long-run average total cost of production as output increases.

D.) a and b

E.) none of the above

.

2.) Minimum efficient scale refers to the

A.) minimum size plant in any given industry

B.) minimum point on the short-run average total cost curve

C.) output level when economies of scale first set in

D.) output level when diseconomies of scale first set in

E.) lowest output level at which average total costs are minimized

.

3.) In long-run competitive equilibrium P = SRATC, because if P > SRATC

A.) losses in the industry would cause some existing firms to exit the industry

B.) positive economic profit would attract firms to the industry in order to obtain the profits

C.) firms would not be producing the quantity of output at which MR = MC

D.) firms would not be covering total fixed costs

E.) none of the above

Discuss the role of moral hazard and adverse selection in the 2007–2008 financial crisis.

Choose two different types of businesses (grocery store or an electronics store), and choose a product from one of the businesses.

As the store's buyer, think of the major objections/questions you would ask a product salesperson if he/she asked you to buy a large quantity and to promote the product.

As the salesperson, describe how you would overcome those objections.

The following two schedules show the amounts of additional satisfaction (marginal utility) that a consumer would get from successive quantities of products A and B.

Instructions: Enter your answers as whole numbers.

3. A Firm has the following production function: y = L^1/3K^1/2

(a) Does this production function exhibit increasing, decreasing, or constant returns to scale? Prove. 


(b) Suppose in the short run, capital is fixed at K = 100. Assuming that the output and factor prices are p, w, and r respectively, Find firms factor demand for labor. What will the effects be when W, R, and p increase? Explain your results intuitively. 


(c) Now, suppose the government decides to impose a payroll tax of $t per worker employed. What will the effect be on L ? Why?

(d) Alternatively, if the government decides to impose a lum-sum tax of $T, what will the effect be on L ? Why?

How is corona virus affecting American economy?

What influences does public health have on the U.S. health care system? Provide both positive and negative examples.

Suppose there are 3 bonds with the following characteristics. There is a 1-year Treasury bond with a face value of $1000, a 8% coupon rate, and the yield to maturity is 8%. There is a 2-year treasury bond with a face value of $1000, a 15% coupon rate, and the yield to maturity is 8%. There is also a 3-year treasury bond with $1000 face value, a 5% coupon rate, and the yield to maturity is 8%.

a) Based on expectations theory, what is the expected 1-year interest rate next year and what is the expected 1-year interest rate 2-years from now?

b) What is the shape of the yield curve right based on these bonds?

c) What does expectations theory predict should happen to short-term and long-term interest rates based on the information from these bonds?

d) Briefly explain, does your answers from part a) fit with the answer to part c)?