The current administration is offering the 2 trillion dollars stimulus package to maintain the loss due to the unprecedented chaos caused by the coronavirus.

Categorize each item into monetary policy versus fiscal policy.

Explain how each item of this package can help the economy.

. A natural monopolist has the total cost function C(Q) = 500 + 5Q and faces the inverse demand curve P = 100 – Q

a) Find the monopolist’s price, quantity, profits, consumer surplus and deadweight loss if the monopolist is not constrained by a regulator (you probably want to draw a picture to help you answer CS and DWL)

P = _________ Q = _________ π = _________ CS = ¬_________ DWL = _________

b) A regulator constrains the monopolist to marginal cost pricing and will subsidize the firm to stay in business and earn 0 profit. Find the monopolist’s price, quantity, subsidy, consumer surplus and deadweight loss (ignore welfare losses associated with funding the subsidy).

P = _________ Q = _________ subsidy = _________ CS = ¬_________ DWL = _________  

c) A regulator constrains the monopolist to average cost pricing. Find the monopolist’s price, quantity, consumer surplus and deadweight loss.

P = _________ Q = _________ CS = ¬_________ DWL = _________

3. You are thinking about starting a bee keeping business to produce honey. You also plan to sell pollination services to almond growers in California. Below is the cost function you have estimated for producing honey and pollination services with 450 hives:
C(QH, QP) = 5,000 + 12QH + 100QP + 0.002 QH QP
where QH is the number of pounds of honey produced and QP is the number of acres of almond trees pollinated.

(5) a. You have contracted to produce 3,000 pounds of honey and pollinate 1,000 acres of almonds. What would your costs be if you fulfilled these contracts with a single set of 450 hives?

(5) b. What would your total costs be if you operated a set of 450 hives to fulfill your honey contract and a separate set of 450 hives to fulfill your pollination services contract?

(5) c. What do your results in parts a and b tell you about the about economies of scope for honey production and pollination services when you produce 3,000 pounds of honey and pollinate 1,000 acres of almonds?

Other than factors like tourism, the multi-cultural nature of the city, and the presence of large corporations, how can you see L.A.'s integration with the larger global economy? Provide some examples of things you see as you move around this vast metropolis. What can you point to that shows our significant global involvement?

3. Currently, people are staying home due to COVID-19, which clearly limits a lot of the activities that people would normally do. While some people will spend more on online shopping, in general, it is reasonable to think that consumption has fallen.

(There are OTHER changes going on as well, but just focus on this one for this question.)

a. Draw an AD-AS graph. Assume that the economy was at full employment before the virus. Then show the SHORT RUN effect on the economy.  

b. If NOTHING else happens, EXPLAIN how the economy will eventually return to long-run equilibrium. Identify the new long-run equilibrium on your graph.

c. The government has just passed a spending bill which is designed to stabilize the economy. EXPLAIN how this would affect the short-run equilibrium on your graph.

For all questions assume the following starting point: The money supply (M) is composed of currency (C) held by the non-bank private sector (NBPS) and demand deposits (DD) held at banks. Banks are required to hold cash reserves (CR) equal to 10% of their demand deposit liabilities. The remainder of the banks DD liabilities are backed by loans (L). Initially banks have 2000 in cash reserves and the NBPS holds 500 in currency. Currently, banks no not hold excess reserves.

a) What are the initial values for DD, L and M?

b) What happens to the values in part a, if the NBPS decides to hold an additional 200 in currency?

c) What would happen to the values in part a if banks decided to hold 2.5% excess reserves?

d) What happens to the values in part a if concerns about the economy's future caused both b and c to happen?

e) If nominal GDP is 5.5 times the money supply, what happens to nominal GDP in parts a-d

Given the result in part-d, what open market operation would you use to keep the money supply at the level in part a of Module 5?

To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, neither Teddy Bower nor TeddySports has expertise in manufacturing those kinds of boots. Therefore, Teddy Bower contacted several Taiwanese suppliers to request quotes. Due to competition, Teddy Bower knows that it cannot sell these boots for more than $54. However, $40 per boot was the best quote from the suppliers. In addition, Teddy Bower anticipates excess inventory will need to be sold off at a 50 percent discount at the end of the season. Given the $54 price, Teddy Bower’s demand forecast is for 550 boots, with a standard deviation of 450.

a.Suppose Teddy Bower orders 530 boots. What would its expected profit be?

b.John Briggs, a buyer in the procurement department, overheard at lunch a discussion of the “boot problem.” He suggested that Teddy Bower ask for a quantity discount from the supplier. After following up on his suggestion, the supplier responded that Teddy Bower could get a 13 percent discount if they were willing to order at least 1,100 boots. If the objective is to maximize expected profit, how many boots should it order given this new offer?

8. This question has to do with calculating the multiplier. Please answer questions 8a through 8c below.

  8a. Define and write the formula for the multiplier.

8b. Compute the multiplier if the MPC=0.3. Interpret the multiplier you just calculated.

8c. An Economist estimates that the MPC is now 0.7 because he received information that a company like GM are very optimistic about the future sales of their cars and trucks, so an economic expansion is inevitable. Calculate the new multiplier. Interpret the new multiplier you just calculated. Did the multiplier get smaller or bigger when the MPC rises to 0.60? Why? What does this do to consumption and investment for cars and trucks and other goods produced and bought in the U.S. economy? Is an economic expansion possible if the MPC had risen from 0.3 to 0.7? Does disposable income fall or rise when MPC rises from 0.3 to 0.7? Explain. Calculate the new multiplier and compare it with the multiplier you just calculated in 9b and then explain your results.

Note: Please label your graphs and axes on graph problems and please show your work and calculations and your steps on the math problems.

Changes that implemented due to COVID-19 in Cartier Organization ?

What did Milton Friedman add to economic theory? Do you agree with his ideas?

i. Explain some key macroeconomics approaches and indicators which are useful in valuing equity instruments.
ii. Briefly describe the efficient market hypothesis and its key implications for the practice of equity valuation.
iii. Explain how a company's financial data may be used to value its equity using a Free Cash Flow approach, giving a numerical or real-world example to illustrate your explanation.

maximum of 500 words

1. In the IS-LM model, analyze the effects of increased optimism of wealth-holders on all the endogenous variables (Y, r, I, S, C, T, L1, L2).