Compare and contrast perfectly competitive markets with monopolistically competitive markets. Which is more realistic and why?

explain monopolistic competition. It is suggested that one way to get into a monopolistically competitive market is to get a franchise for a nationally advertised product. Provide an example of a franchise and indicate how this is a monopolistically competitive situation based on your definition.

Consider the Keynesian Model for the Open Economy with Government:

Planned Expenditures: AE = C + I + G + X - IM

Consumption: C = 435 + 0.72 (Y- T)

Net Tax Revenue: T = 130 + 0.26 Y

Gross Investment: I = 675

Government Expenditures: G = 540

Exports: X = 545

Imports: IM = 110 + 0.12 Y

Potential Output: Yp = 3,550.742

Section 1: Model Questions

Part 1. What is the slope of the AE curve?  

Part 2. What is the vertical intercept of the AE curve?

Part 3. Calculate the equilibrium ouput (Y^e).

Part 4. Calculate the change in Government Expenditures (ΔG) required to close the output gap (Yf-Ye).   

Part 5. Calculate the change in autonomous Taxes (ΔTo) required to close the output gap (Yf-Ye).

Assume a Ricardian (Comparative Advantage) place. Also assume that Southland requires 8 hours for laptop computers and 2 hours for desktop computers, while the rest of the world (RoW) needs 4 hours for laptops or 2 hours for desktops. Each country has 1000 labor hrs. available. Additionally, assume these countries decide to open for trade and they specialize in products that they have comparative advantage.

What is ToT (terms of trade) for one desktop computer?

A) 0.25 < ToT < 0.5 (< signs are greater than or equal to, not < in A, B and C)

B) 2 < ToT < 4

C) 4 < ToT < 2

D) All of the above

We are in the midst of a global pandemic that has caused a stock market crash and has the potential to cause a massive macroeconomic crisis such as another Depression. What monetary and fiscal policies do you recommend to help this situation caused by COVID-19. Your answer should be 2-3 paragraphs long.

1. (30) True or False (explain your answer briefly. A simple "true" or "false" without
explanation will get zero point)
a) (6 points) An upper stream manufacturing rm merges with another downstream distri-
bution firm so as to engage in price discrimination. Such a vertical merger will decrease all
consumer'swelfare.
b) (6 points) Two firms merge together, only if the transaction cost must be reduced.
c) (6 points) Specic human capital is a barrier of vertical integration.
d) (6 points). The benet of coordination gives rise to vertical integration.
e) (6 points). Social welfare decreases after two firms merge with each other.

1a.

A "political business cycle" suggest that:

Multiple Choice

• cyclical swings in the economy are produced by the inherent instability found in capitalist economies.

• there is a trade-off among goals that tends to make the economic policies of state and local governments procyclical.

• the tools of fiscal policy may be used for political gains and reelection.

• the cyclically adjusted budget is a better indicator of the state of the economy than the actual budget.

1b.

What are the goals of fiscal policy?

Multiple Choice

• Increase deflation and increase nominal GDP.

• Increase profits and reduce expected returns.

• Control inflation and promote full employment.

• Increase nominal wages and reduce real interest rates.

1c.

From the information provided, determine whether you are given an Aggregate Supply or Aggregate Demand Schedule and, if Aggregate Supply, the time frame associated with the price level and output. HINT: You may want to plot out the points on a graph.

Multiple Choice

• Aggregate Demand

• Short Run Aggregate Supply

• Long Run Aggregate Supply

• Immediate Short Run Aggregate Supply

Explain why profits are largest when mc=mr and not when mr>mc ? and is there a difference between sales revenue maximizing and profit maximizing?

marketing essay

When the FED buys 10-year treasury notes and mortgages + student loan backed securities, inflation in the short run will

1. Drop to 0%

2. Remain the same

3. Increase

When the FED buys 10-year treasury notes and mortgages + student loan backed securities, inflation in the long run will

1. Drop to 0%

2. Remain the same

3. Increase

When the FED buys 10-year treasury notes and mortgages + student loan backed securities, consumption and investments will

1. Drop to 0%

2. Remain the same

3. Increase

How will open market purchases affect the economy short run GDP

1. Go up

2. Not change

3. Not enough info to answer

Explain the concept of economic rent and how it differs from economic profit?

A heat exchanger purchased by Hot Spot Manufacturing cost $24,000. The exchanger will save $4,500 in each of the next 10 years. Hot Spot will use SOYD depreciation over a six-year depreciable life. The declared salvage value is $3,000. It is expected the exchanger will be sold for the declared value. Hot Spot pays taxes at a combined rate of 42% and has a MARR of 8%. Was the purchased justified?

discuss how market supply is determined, he most important description of a firm is its short run cost structure. Discuss the components that make up that structure and the relationships between them?