Let x and y denote the amount of goods X and Y. Find the demand functions of X (do not need to find that of Y) when your preferences are represented by the utility function U = x + xy + y. Is X normal good? Can you confirm law of demand for X? What is the relationship of X with Y? Answer all of them by using the demand curve you derived.

do you think free trade is really free? What are the likely costs of adopting a free trade regime? Do you think governments should play any role in reducing these costs? Why or Why not?

Suppose a firm the following production function: f(x1,x2)=x_1^(1/2) x_2^(1/2)

This firm purchases inputs and sells output in competitive markets. The price of output is $10 per unit and the prices of the inputs x1 and x2 are $10 and $2 respectively. In the short run x2 is fixed and equal to 16. The marginal product for input 1 is: MP1=4/(x_1^(1/2) )

a) What is the profit maximizing level of input 1 for this firm to hire?
b) What is the profit maximizing level of output and the associated level of profits?
c) Derive a function describing isoprofit lines for this firm. Calculate and describe the slope of an isoprofit line for this firm.
d) Suppose the price of input 1 increases to $20. Use your isoprofit function to find the optimal amount of input 1 for this firm to hire.

The table below uses data for the year 2014, adjusted to be comparable to each other. All population values are in thousands.

Instructions: Round your answers to one decimal place.

a. Fill in the blanks in the table above.

b. In part a, you should have found that the unemployment rates of the three countries differ significantly from one another. Select the possible reasons to explain why the countries might have different unemployment rates.

Germany could be in a recession and have higher cyclical unemployment, or .Germany could have more powerful unions. or Germany could have higher (and binding) minimum wages. or Japan could have a more liberalized labour market leading to lower frictional unemployment. or Germany and France could have more generous employment benefits. or All of the choices are correct.

Describe the QE policy. How did the Fed’s balance sheet change? How does QE compare to traditional open market operations?

1- Discuss adverse selection and moral hazard? Give examples

2- Define externality and give examples of positive and negative externalities? Give examples

According to the Law of One Price, assuming there are no transport costs and freecompetition exists, identical goods sold in different locations will have the same price.2Using the concepts of Arbitrage and Supply & Demand, explain why this must be thecase – at least in theory. Your answer should include a diagram. Why doesn’t the Lawof One Price hold in real life?

Consider the following: C= 116 + 0.8 (Y - T) - 1000r

I= 140 - 2000r G= 165 T= 30 + 0.25Y

EX= 100; IM= 110 + 0.2Y

L= 5Y - 100000r M= 60000 P= 100 rrr= 0.2

IS: Y = 1/0.6 (387 - 3000r) Y = 645 - 5000r

LM: Y = 1/5 (600 + 100000r) Y = 120 + 20000r

a) If G increases by 30, is it an expansionary, or a contractionary (pick one) fiscal policy? By how much does the IS and LM curves shift and by how much does Y change?

How much is the crowding out effect? Is the budget balanced? If Fed monetizes the additional budget deficit to eliminate crowding out, do they need to buy bonds, or sell bonds?

b) If the Fed purchases securities worth of 2500; is it an expansionary, or a contractionary (pick one) monetary policy? If there is no leakage of excess reserves, then by how much does it change the money supply? By how much do the IS and LM curves shift and by how much does Y change?

1. Suppose a polluter initially faces marginal abatement curve MAC1 = 320-10E1 , but it has the possibility of investing in R&D and thereby lowering its marginal abatement cost curve to MAC2 = 160 – 5E2. Compute the cost savings to the polluter if it adopts the new technology (MAC2) after the introduction of an emissions tax of $100 per tonne. Compute the cost savings under a standard that is set at 20 tonnes. Explain why the tax provides a larger incentive to innovate than does the standard. (10 points)

When income effects are very strong for the representative consumer ...

any increase in his productivity will shift the AD curve farther to the right than the AS curve; the consumer wants to consume more of the produced goods but less leisure.

any increase in his productivity will shift the AD curve farther to the right than the AS curve; the consumer wants to consume more produced goods but not more leisure.

any increase in his productivity will shift the AS curve farther to the right than the AD curve; the consumer wants to consume more produced goods and leisure.

any increase in his productivity will shift the AS curve farther to the left than the AD curve; the consumer wants to consume less produced goods and leisure.

any increase in his productivity will shift the AD curve just as much as the AS curve; the consumer wants to consume less leisure.

Question 5.

1. Why do macroeconomist require tools to bring forth policies? What are these tools? (10 pt)
2. Why can’t macroeconomist, perform experiments like chemist to test their hypothesis? How do they try to overcome this obstacle? (10 pt)

1. Say the firm is in a perfectly competitive market. If the current market (equilibrium) price is $ 60, at what output level will the firm as a profit maximizer produce at?
2. Say the market price rises to $ 80. At what output level (as a perfect competitor) will this produce at?
3. How much profit is the firm making at a price of $80? Based on this calculation, do you expect firms to enter or leave this market?
4. Say instead this firm is a monopoly. If the firm maximizes profit at an output level where marginal revenue equals $ 50, what output level will this be?

Table 24-2

The following table pertains to Jouetpays, an economy in which the typical consumer's basket consists of 15 pounds of prunes and 8 dolls.

Refer to Table 24-2. The cost of the basket

Table 24-1

The following table pertains to Quicheland, an economy in which the typical consumer's basket consists of 12 bushels of apples and 7 bushels of almond .

Refer to Table 24-1. If Year 1 is the base year, then the inflation rate in Year 2 was

Table 24-3

The following table lists the per gallon prices of gas and milk for the months of September, October, and November. Assume that the typical consumer buys 100 gallons of gas and 7 gallons of milk each month, and that September is the base period.

Refer to Table 24-3. What is the consumer price index for November?

Table 24-1

The following table pertains to Quicheland, an economy in which the typical consumer's basket consists of 12 bushels of apples and 7 bushels of almond .

Refer to Table 24-1. If Year 1 is the base year, then the CPI for Year 1 was

Table 24-2

The following table pertains to Jouetpays, an economy in which the typical consumer's basket consists of 15 pounds of prunes and 8 dolls.

​Refer to Table 24-2. The inflation rate was

is the current, highly-political, method for selecting and seating justices on the United States Supreme Court the most effective way to staff the federal judiciary? Or, on the other hand, should we (as a society) look for a less-political way to go about this process? If we selected another method, what would that look like? In other words, how do you think this process could work better?