PLEASE GIVE ME LONG AND DETAILED ANSWERED (with specific examples) - Both Answers Combined Should Be About a A4 Paper Long. Thank you.

Prior to the current Covid-19 travel advice the Department of Foreign Affairs and Trade (DFAT) Smart Traveller website had the following advice for Australians. “Venezuela has closed its land borders with Brazil and Colombia and maritime borders with Aruba, Curaçao and Bonaire until further notice. The political and economic situation remains very unstable. Monitor local media and follow the advice of authorities. We continue to advise you not to travel to Venezuela.”

(i) Assuming COVID-19 does not exist at this time what would your advice be to an Australian company that has just won a major and highly profitable project management contract? Please provide a sound rationale for your advice.

(ii) What other sources of political risk can an exporter face and how can they be counteracted? Please provide specific examples in support of your answer.

What are the short-run and long-run effects of monetary tightening on nominal interest rate? 12. Ture of False (based on Question 11 above): In the short run, normal interest rate does not rise as much as the real interest rate. (Please justify)

11. What are the short-run and long-run effects of monetary tightening on no minal interest rates? (Please justify)

8. What is the relationship between real money demand and interest rate? (Please justify)

If you purchased shares of common stocks in 1990 for $2,000 and sold them for $3000 in 2001 you would be liable for capital gains taxes on?

4. Poway is a town that has 70 families with a child, and 30 without a child. 30 of the families with a child are willing to pay as much as $6,000 to educate their child, and 40 are willing to pay as much as $4,000 to educate their child. Each educated child creates a positive externality of $30 for each family in Poway but the cost of educating a child in Poway is $5,000.

(a) Without regulation, how many residents educate their child?

b) With regulation, how many residents educate their child?

c) What is the change in social profits by regulating the externality?

Residents of the town of Los Locos (population 100) like to drive noisy off-road vehicles, but they hate the disturbance and dust caused by each others’ vehicles. Each vehicle purchased by a resident causes $10 worth of damage to each of the 100 residents. Forty residents are willing to pay up to $3,500 for an off-road vehicle, 20 residents are willing to pay up to $3,000 for an off-road vehicle, and 40 residents are willing to pay up to $2,500 for an off-road vehicle. The price of an off-road vehicle is $2,200.

(a) Without regulation, how many residents buy an off-road vehicle?

(b) With regulation, how many residents buy an off-road vehicle?

(c) What is the change in social profits by regulating the externality?

Many make the argument that although perfectly competitive markets achieve the highest level of social welfare, because markets are never perfectly competitive, society is worse off from using market-based systems. Discuss whether you agree or disagree with this statement

Fixed Exchange Rates a. Assume that Canada adopts a fixed exchange rate and that there is a rise in the world interest rate (Rw). Explain the impact on the money supply and foreign reserves of the Bank of Canada. Can policy makers use domestic open market operations to counteract the impact in any way?

b. Suppose there is a one off rise in the foreign price level P*. Assuming the Purchasing Power Parity holds, use the DD-AA model to show that the exchange rate will rise immediately in proportion to the rise in P*. How will this impact the internal and external balance of a country, assuming that it is in balance before the rise in P*?

c. If domestic and foreign currency bonds are perfect substitutes and investors’ preferences change such that they want to hold more foreign currency bonds how does this impact the risk premium on domestic bonds? Does a floating or fixed exchange rate minimize the impact on output and why?

Suppose that a firm uses labour and capital in production. The wage rate is $10 per unit of labour and the rental cost of capital is $10 per unit. The firm is currently producing 100 units of labour and the rental cost of capital is $10 per unit. the firm is currently producing 100 units of output by using cost minimizing input combination of 50 units of labor and 50 units of capital.

On an isoquant and iso-cost diagram, show than an increase in output from 100 units to 150 units will result in higher short-run total cost, average cost and marginal cost than in the long-run counterparts.

Please explain why its correct

17. Since the marginal product
quantity of output divided by the change in the quantity of labor, it stands to reason that:

a. a firm would never operate in the range where marginal product is negative.
b. a firm would never operate in the range where marginal product is decreasing.

c. marginal product will continually increase as the firm produces more.
d. there is no predictable relationship between marginal revenue and marginal cost.

Answer: _____

18. Adding more fixed inputs to the production process shifts the total product curve _______ and the marginal product curve _______.

measured on the horizontal axis
measured on the horizontal axis

of labor equals the change in the

a. upward; upward
      b. upward; downward
      c. downward; upward
      d. downward; downward

Answer: _____

19. The total product curve for blueberries slopes _______ reflecting that as more workers are employed more blueberries are produced, and becomes ______ because the marginal product of labor declines as more and more workers are employed.

      a. upward; flatter
      b. upward; steeper
      c. downward; flatter
      d. downward; steeper

Answer: _____

20. Which of the following
FALSE?

      a. The marginal cost
      cost curve.
      b. The marginal cost
      marginal returns.

statements about the marginal cost curve is

curve is equal to the slope of the total

curve slopes upward because of diminishing

c. Marginal cost is equal to the change in total cost generated by producing one more unit of output.
d. Marginal cost depends upon the level of fixed costs.

Answer: _____

An amusement park, whose customer set is made up of two markets, adults and children, has developed demand schedules as follows:

            Qa = 20 – Pa            where a is adult market

            Qc = 30 – 2 Pc         Where c is children market

            QT = 50 – 3 PT         where T is the two markets combined

Assume that the marginal cost of each unit of quantity is $5 (constant), the owners of the park want to maximize profit:

1. Calculate the price, quantity and profit if the amusement park charges a different price in each market.
2. Calculate the price, quantity and profit if the amusement park charges the same price in the two markets combined.