Smelling of Tulips, Inc., a perfume company, estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results. Total fixed cost (TFC) at S.T. Inc. is $1,250.

a.    What level of output (Q) is associated with the minimum AVC? What is the value of AVC at this minimum?

b.    Determine equations for ATC, TC, and MC. Graph one scatterplot of Q vs. TC, and another scatterplot of Q vs. ATC, AVC, and MC.

c.    When output is 9, how much is TC, AVC, ATC, and MC?

d.    At what amount of output does labor change from exhibiting increasing returns to decreasing returns?

Question 1

1. Describe briefly the three hypothesis testing procedures that are available under maximum likelihood estimation. Which is likely to be calculated in practice and why?  
2. What stylized fact of financial data cannot be explained using linear trend models? ( 10 marks)
3. Which of these features can be modelled using a GARCH (1,1) process? ( 10 marks)

IS-LM closed economy – SR

The Economy of North Haverbrook is described by the following agents and characteristics.

consumers C = 50 + 0.85 (Y-T)

(taxes) T = 100

(government expenditures) G = 100

(investments) I = 500 – 50r

(money supply) M = 3,000

(price levels) P = 1

(money demand) L (r,Y) = Y – 10r

(potential output) Y* = 3200

The goods and services markets in equilibrium is described as: Y = AE, where AE = C + I + G, and money market is in equilibrium when M/P = L(r,Y).

[2 points each, except for h) 4 points]

1. Find the aggregate expenditure function

2. Find the IS curve

3. Find the LM curve

4. Find the equilibrium exchange rate and output (Y, r)

5. Find the aggregate demand curve

6. Find Private savings, Public Savings and National savings

7. Do we have an expansionary gap or recessionary gap? What size?

8. If fiscal policy is used (government expenditure: G), how much +/- change will be required to close the gap?

1. If fiscal policy is not used, how will the gap close? (impact on prices and output – you can graph a diagram if it helps)

Consider an individual making choices over two goods, x and y with initial prices px= 2 and py= 1, with income I= 100: (a) If an individual has the utility function u(x;y) = 3x+y. what would the total, income and substitution effects of a price of x increase to 5? Show your work (b) If an individual has the utility function u(x;y) =x^2+y^2; what would the total, income and substitution effects of a price of x decrease to 0:50? Show your work

Suppose members of the United States, Mexico, and Canada trade agreement (USMCA) agree to reduce imports of foreign oil and set a price floor for North American oil. Briefly describe the impact this might have for Alberta oil producers, and for Canadian oil consumers. (200 words)

Firms that have market power can apply the mixed bundling strategy to increase their profits. Some researchers claim that even if a firm does not have any market power, i.e., even in a competitive market, firms can use mixed bundling (for example, those small restaurants/fast food restaurants located in the shopping malls). Explain why and how firms in competitive markets may apply mixed bundling. Provide a numerical example to prove your case.

Explain how the value of a social media network increases with the number of connections. Apply concept to explain why Facebook or Google often purchase new, unprofitable startup social media companies for billions of dollars.

what is the current relationship between Saudi Arabia and Russia. In economic terms, describe what is occurring. (200 words)

What is OPEC and how would it be described in economic terms? 200 words

Over the past seven weeks, we have explored different decades of US history and applied principles of macroeconomics to their outcomes. Take this time to share what you have learned with your classmates. In your initial post, respond to the following:

Choose one macroeconomic concept you applied in your final project of the years 2000-2010. Explain how it helps describe the economic outcomes of the decade you researched during 2000-2010.

One economic question is deciding how to produce. That means businesses need to make decisions on what types of production systems and what types of inputs to use. The isoquant/isocost model allows us to conceptualize the answer(s) a business might have for the question of how to produce. The relative price inputs plays a role in answering the question of how to produce.

There may appear to be times when a firm does not appear to adjust input use to changes in relative prices of inputs. Explain why this might be the case.

WHAT IS THE BEST WAY TO MOTIVATE AN EMPLOYEE AND WHY?

should the United States adopt information-control regulations similar to Britain’s Official Secrets Act? Explain why or why not.