Consider the market for loanable funds. If firms’ expectations about the economy improve and the government reduces taxes on investment income, the real interest rate will ______ and the quantity of loanable funds will _______

Briefly discuss the similarities and differences between Adverse Selection and Moral Hazard.

25. Unions temporarily gain additional bargaining power. Show the short-run impact on an AS-AD graph. Also show the long-run result, if monetary policy is not accommodative.

How does your faith (Christianity) play a role in/impact your marketing activities? on how to advertise your product

When it comes to the History of Economic Thought: A Critical Perspective by E.K Hunt

Explain the neoclassical theoretical argument that competitive capitalism should automatically self-adjust to achieve full employment equilibrium. During the Great Depression, real wage did not increase. Why was this economic fact in contradiction with the neoclassical (and Keynes’s) theory of employment? How was Keynes’s theory of interest rate and saving different from the neoclassical one? Why did Keynes believe that there were situations where monetary policy would be ineffective to bring the economy out of depression?    

When it comes to the History of Economic Thought: A Critical Perspective by E.K Hunt

Jevons demonstrated that consumers’ demand behavior could be derived from consumer’s utility maximization. In a context of two commodities (X and Y), give a simple and brief proof that a utility-maximizing consumer would exchange the two commodities up to the point where the relative ratio of marginal utility between the two commodities exactly equals their relative price ratio. What is General Equilibrium? Explain how Walras set up the general equilibrium model. What difficulties did Walras have in order to demonstrate that market forces could automatically correct disequilibrium?

1. Explain why democracy can choose inefficient amounts of public goods.

1. Explain why the used car market is both an adverse selection and an asymmetric information problem.

In attempts to correct market failures, a government policy is proposed. Assume that the costs of a potential new government program will be paid now by many individuals. The benefits will be received by a relatively small number of individuals several years in the future. Why might these conditions affect a government's success or failure in attempting to decide whether or not to establish the new program?

1. Give an explanation of the median voter model. Why might a minority say that democracy can never represent their interests?

1. Give three ways in which the government can intervene and solve for spillover costs.

how would decisions about managing forests for carbon sequestration be affected by the speed at which wood building material decay?

1. Explain why pollution is considered a negative externality. Give two possible government solutions to the problem. Then give a possible economic reason why government might fail to resolve the problem.

1. Explain what the principal agent problem is. Suppose you have a teacher who only talks about his private life in class rather than teaching. What are some ways the college can insure that their teachers are teaching?

1. Find an example of each of the following: moral hazard problem, asymmetric information problem, and the adverse selection problem. Explain how each leads to an overallocation or underallocation for society. How can each be fixed?