Consider two economies: A and B. Both have identical parameters a =1/3,s =.2, L =30, and A =1. However, Economy A has depreciation rate d = 0.03 while Economy B has d = 0.10. Both economies start with K₀ = 10.

1. Which economy is richer in year 0 (calculate GDP per capita for each country).
2. Which economy has higher consumption per person in year 0 (calculate C per capita).
3. After 50 years, which economy is richer in year 0 (calculate GDP per capita for each country).
4. After 250 years, which economy is richer in year 0 (calculate GDP per capita for each country).
5. In light of your findings, does it matter – in the long run – how quickly the capital stock depreciates in an economy.

Analyze the concepts of accounting profit and economic profit. How are they different, and why are there two different concepts? Why do economists focus on the “economic profit” concept? Specifically, what does a focus on economic profit tell us about decision making and when changes in behavior (or undertaking projects) occur?

1. Suppose a firm has the total cost function T C = 3/8Q^2 + 400 (a) Is this firm in the short run or long run?

(b) Suppose this firm is facing a perfectly competitive market where the price is P = 24. What is the firm’s marginal revenue?

(c) Write the firm’s profit function and solve for the profit-maximizing quantity of production Q∗ . (3 points) (d) How much profit does the firm make at the profit-maximizing level of output? (1 point) (e) Write an equation for the firm’s short run average variable costs (AV C). (1 point) (f) Write the condition for whether a firm should continue to operate or shut down. Should this firm shut down? If not, when should it shut down? (2 points)

2. Suppose a firm faces an inverse demand curve P = 6 − 1/2Q and has a total cost function T C = 1/4Q^2 − Q. (a) Is this firm a price-taker or does it have market power? Explain. (2 points) (b) Write an equation for the firm’s profit function. (1 point) (c) Solve for the firm’s profit-maximizing level of output, Q∗ . (2 points) (d) What price does the firm sell its product at? (1 point)

Is it a good idea to offer goods on the internet?

In your response, provide summaries, NOT quotes, of material set out in the text to show that you have read the assigned chapters and can apply what you have read.

All that you need is in the text. Ideally, the text will be your only source. As you progress through the readings, your responses should incorporate information you have gathered from multiple sections of the text.

How did the Federal government’s attempt at reconstructing the South embitter Southerners and exacerbate racial tension?

Assignment Details

Please use your own experiences and the knowledge you have gained from this week’s readings to answer the following topics and questions. You may also use information that you find in the textbook, AIU’s library or the Internet to support your discussion. Make sure you use economic concepts in your main contribution.  

Think of items that you have purchased in a market:

• Big ticket items like a house, or an apartment rental, or a car;
• Or ordinary items in your weekly budget, like coffee, tea, gasoline, bread, Milk, etc.
  
  You can consider some of the following questions in your contribution.

1. What price trends have you noticed over the last few years? Do the prices fluctuate? Have prices increased or decreased?
2. How would you use what you have learned concerning Supply and Demand to explain these trends?
3. Have there ever been any shortages or surpluses? How would you explain that?

In a few paragraphs - Discuss the difference between complicity and vicarious liability. Describe which crimes might involve complicity and which crimes might involve Vicarious liability.

Financial ratios are essential to provide an accurate valuation of a firm. Select a publicly traded firm of your choice. Select one ratio each in the areas of (a) performance, (b) activity, (c) financing, and (d) liquidity warnings. Provide an evaluation of the selected firm's strengths and weaknesses. Based on the ratios you selected, how well does your chosen firm perform? Explain.

Suppose the banks in an economy have a reserve-deposit ratio of 10 percent and the currency deposit ratio is 20 percent.

a. If the Central Bank increases the monetary base by $400 million through open market operations, what will be the increase in the money supply?

b. If the Central Bank decreases the discount rate and firms react by decreasing the reserve deposit ratio to 5 percent, what is the change in the multiplier? Will this change increase or decrease the money supply?

c. There is a rumour circulating that bank accounts are being hacked so many persons withdraw their deposits from the bank. What impact does this have on the money multiplier, high-powered money, and the money supply?

Given our inability to accurately “do the math” when we are making decisions about a future events with an uncertain outcome, please describe how people {like you and me} usually make those decisions? What implications may this “reality” have for the way financial markets actually function?

An economy is initially in equilibrium at the natural level. The central bank increases the money supply. Graphically illustrate and explain short-run monetary nonneutrality and long-run monetary neutrality using the AD–AS model.

Provide a thorough comparison of the “cost-controlling” health insurance plans. Clearly identify the advantages and disadvantages of each system for patients and health care providers.