The Big Push model illustrates alternative cases where the economy can reach equilibrium with a higher level of total output with coordinated efforts by modern firms and cases where such an outcome is impossible despite such efforts. Explain with a graph only the case where there exists a possibility of a coordination failure.

Suppose that a developing country devotes extensive resources towards improving the education and skill level of the labor force. How might this help the economy avoid a coordination failure? Is this strategy likely to be successful? Why or why not?

Two rural individuals Matyás and Toka are contemplating leaving their village for a nearby town. Given that Matyás has a secondary school certificate, she has a higher probability of obtaining an urban sector job than Toka, who is a primary school drop out. If they remain in the village and work on their family farms, they earn $200 each per year if the yield is high and $100 per year if the yield is low. The yield will be high with probability 0.5 and low with probability 0.5. Alternatively both these individuals can choose to migrate to town, in which case they each expect to find a formal or informal sector job, paying the following earnings according to the given probabilities.

1. (a) According to the Harris-Todaro model, on a one-year time horizon, which individual will migrate? [2 points]

2. (b) On the three-year time horizon, which individual(s) will migrate? (Assume the rate of interest at which both can borrow or lend money is i = 5%) [5 points]

3. (c) Assume a one-year time horizon. Suppose now that there is a traditional family support payment of $40 that all urban migrants must pay yearly to their relatives back in the village. At the same time, each bears a ‘psychological cost’ associated with moving to the city. Such a cost is $25 for Matyás and $15 for Toka. Again, according to the Harris-Todaro model, which farmer will migrate to town? [5 points]

4. (d) Assume a one-year time horizon, Still maintaining the ‘psychological’ costs associated with moving to the city, suppose now that all formal jobs also come with medical benefits, which are worth $30 a year, in additional to the wage. Informal sector jobs do not carry any such benefits. According to the Harris- Todaro model once again, which individuals will migrate to town? [3 points]

Enrique lives in rural Ecuador and is finishing his high school. As an outstanding student, he was accepted by the leading private university, University de Quito to study in a two year program on comparative literature and linguistics to become a college teacher. If he goes to university, he will pay a tuition fee of $1000 ($1 = 1 peso) per year (for 2 years). Suppose also that there is a “psychological” cost of $400 associated with moving to the city of Quito, which represents the money equivalent (paid only once in the first period) of leaving his family / girlfriend.

In the first year, Enrique can work in the library of the university and earn $1000 per year, while during the summer of the second year he can do an internship and earn $2000. At the third year, he may start working as a college teacher, where he will earn $4000 per year for the first 2 years of his career. For the sake of this exercise, suppose that we only have 4 periods.

If Enrique refuses to go to University, he will work on the family farm and will earn $1000 per year for the first two years. His father promises him a salary equal of $3000 from the third year. Consider a discount factor of 10%.

1. a) Calculate the expected present value benefits of studying.[7points]

2. b) Calculate the expected present value costs of studying (direct and indirect costs) [7

   points]

3. c) Should Enrique go to the University? [1 points]

1- Give two examples of how the United States prepared to fight World War II before war was declared?

2- Give two examples of how the Allies planned for the post-war world.?

What is a production function? What does it describe? How is it used?

Define "marginal product". How is it calculated? How is it used?

In economics, how is "profit" defined?

In economics, how is "economic profit" defined?

COLD WAR DISCUSSION What was the reason for the breakdown in friendly relations between the United States and the Soviet Union? How has this shaped history for the last 50+ years? During the Cold War, politics abroad and politics at home were connected. How so? How did actions abroad shape beliefs at home or vice versa?

1. Now, suppose that Humongous National loans the amount that you found in part b) to Ronaldinho Gaúcho.

Fill out the blanks in the Humongous National Bank’s T-account to reflect this transaction. Show your calculation.

Answer:                                                                                                                                (4 points)

Humongous National’s T-account:

Assets                                                                               Liabilities__

TR=   $3,080                                                                              D =  $3.080

            RR = $369.60

            ER = $2,710.40

2. As a result of this transaction, can Humongous National continue loaning out money using Leo Messi’s initial deposit of $3,500?

Answer:  (circle the correct answer)                                                                                  (3 points)

YES    NO

I have the T-Chart filled out, I just need an explanation on the YES/NO question. Thanks

I'm having trouble distinguishing which of the interest rates, either nominal or real, central banks are able to control directly. Expanding on that, is there a difference between monetary policy's impact on short and long-run interest rates? I understand that monetary policy can control short-run nominal interest rates, but is the same true for long-run nominal interest rates? Do central banks have any control over real interest rates or only nominal? I am so confused.

Essentially, what are the differences between these four types of interest rates:

1. Short-Run Nominal Interest Rates

2. Long-Run Nominal Interest Rates

3. Short-Run Real Interest Rates

4. Long-Run Real Interest Rates

And which are controlled by monetary policy?

If this seems all over the place and incomprehensible, then I would appreciate a general explanation of monetary policy with respect to nominal and real interest rates if possible!

Explain a situation you have observed (or read about) in which a firm made a decision considering irrelevant costs or did not consider relevant costs. What was the outcome of the decision, and what could have been done differently?

Determine the profit maximizing quantity and profit levels; and then graph (in general form) the outcomes for the production function ( standard form with q(K,L) curve ) , cost/revenue functions (with MC, AC, and P curve/line) and profit function ( profit (q) curve ) for the following all graphs have to display q*: 1. C(q)=1000+q^2, P=10000 2. C(q)=1000+4q^3, P=10000 3. C(q)=1000+q^1.5, P=10000 4. Explain the differences between your outcomes and give a plausible reason for the difference between 1 & 2 and then for 1 & 3. Specifically: what changed, what didn't, what the effects are, and why.