In the New Keynesian Macroeconomics business cycles are driven by demand shocks, while in the New Classical Macroeconomics they are driven by supply shocks. Explain this statement using your knowledge of the AD-AS model.
In: Economics
You should be able to answer each of the following questions in a just a few sentences. Graphs or figures might be good to include if they help you to make a better argument or to explain your answer more clearly.
3. Grandma promises to sneak you some bourbon while your parents are cleaning up the Thanksgiving dishes, but only if you can impress her with something you learned in your economics class. Carefully explain to Grandma why the short run average total cost curve is U-shaped so that the two of you can sip a little Maker’s together.
4. In order to improve your chances of matching with someone, you decide to update your online dating profile. Specifically, you decide that to impress potential partners you will show off what you know about monopolies and marginal revenue. Draft out an explanation as to what marginal revenue is for the monopolist so that you can have them all wanting to swipe right!
In: Economics
In: Economics
In the New Keynesian Macroeconomics business cycles are driven by demand shocks, while in the New Classical Macroeconomics they are driven by supply shocks. Explain this statement using your knowledge of the AD-AS model.
In: Economics
Jessica derives utility from her consumption of two goods, video game plays on an X-Box (call it good X) and high energy yogurt (call it good Y). Her utility function is U(X,Y) = XY. The price per play of games is $2.00 and the price of yogurt is $10 per container and Jessica's income is $50 per week. She is presently consuming a bundle of game plays and yogurt such that her marginal rate of substitution is 1 (or -1, if you wish). Use this information to answer the following questions.
(4)a. Is Jessica currently consuming the bundle of game plays and yogurts such that her utility is maximized? Explain.
(4)b. If she isn’t choosing her utility maximizing bundle, what adjustment should she make to her consumption bundle?
In: Economics
A firm with market power faces an inverse demand curve of P = 100 – 10Q. Assume that the firm faces a marginal cost curve of MC = 10 + 10Q.
(4)a. If the firm cannot price discriminate, what are the profit maximizing levels of output and price?
(4)b. Given you answers in part “a,” what are the values of consumer surplus, producer surplus and deadweight welfare loss?
(4)c. If the firm is able to practice first degree (perfect) price discrimination, what is the firm’s output level?
(4)d. If the firm is able to practice first degree price discrimination, what are the levels of consumer and producer surplus and deadweight welfare loss?
In: Economics
In: Economics
Identify and discribe the Rogers’ five factors that influence diffusion process of innovation. Using an innovative product example, analyze the product using the five factors, and suggest your ideas to improve two of the areas among the five factors.
In: Economics
Discuss the effects of a shock that increases oil prices in the AD-AS model. Be sure to explain also the problem of stagflation.
In: Economics
In: Economics
Discuss the various types of frictions and distortions in labor and product markets that make the adjustments of wages and prices slow, according to New Keynesian macroeconomists.
In: Economics
In the New Keynesian Macroeconomics business cycles are driven by demand shocks, while in the New Classical Macroeconomics they are driven by supply shocks. Explain this statement using your knowledge of the AD-AS model.
In: Economics
Due to the pandemic of COVID-19 in the U.S., the price of U.S.
crude oil contracts for May 2020 delivery has turned negative for
the first time in history. For instance, West Texas Intermediate
(WTI) crude oil contracts for May fell 301.97 percent to -$36.90
per barrel.
State your understanding of this phenomenon and carefully explain
your arguments with economic tools and/or economic intuition,
including the aspects of
1. demand for oil by households;
2. demand for oil by non-household demanders, such as
manufacturers;
3. market supply of oil;
4. equilibrium price and quantity.
In: Economics
In: Economics
Question 1:Fact I:Consider the following setup that follows the
standard Solow model in Country A.There are N consumers,each
endowed with one unit of available time.Consumers do not value
leisure and they divide output between consumption and
savings
according to the following rule:a fraction s of output is saved,and
the rest is consumed.There is a representative firm that has a
Cobb-
Douglas production technology of the form Y=zF(K,N),where K denotes
capital,N denotes Labour,z is(Total Factor Productivity
（TFP).Initially country A had 100 units of Capital,144 units of
labour and population growth rate was 0.01.Suppose you are
given
the fact that in this economy depreciation d is 0.09 and at steady
state,the output per-capita could be expressed as
y*=(k*)05.Now,
consider the unfortunate situation where a disease took several
lives,reducing the number of labour force equal to 81 units.
1.1 Describe and explain changes/effect of this disease on country
A's per-capita output,and per capita capital in the steady
state,comparing these with the initial steady state that was
prevailing before the disaster.(Note:you are supposed to
describe and explain changes in detail,following Solow Model.The
numbers are provided to give you more details
about the economy,but you are not required to provide mathematical
derivations/numbers for this question).
1.2 If you were illustrating the old and new steady state in a
diagram,with per-capita capital in x-axis,describe how your
graph would change before and after the disease.Would you expect
the growth rate of output per worker in country
A smaller or greater than it was before the disease?
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