Buck is an accounting major. After completing 75% of the required more credits toward an accounting degree, Buck decided that couldn’t spend his career stuck in an office, and wanted to become a Police Officer. Buck however, remembered the lessons on marginal analysis and sunk cost from his macroeconomics class and decided to complete his accounting degree.

Explain how Buck could have arrived at this decision.

Consider National Competitive Advantage and determine whether firms from a particular country have a global advantage in their firm’s industry.

To recover your investment and earn a MARR of 10% per year, how long will you have to own a business that costs $230,000 to setup, generates $50,000 per year in income and has $15,000 per year in expenses ?

Nick, a director of the NH Oil Corporation, is specially trained in petroleum trading. The Corporation’s board approves several deals in which it pays too much for petroleum. If Nick approves all the deals without first reviewing them, he is most likely:

1. not liable under the business judgment rule.
2. liable for breach of the business judgment rule.
3. liable for breach of the duty of loyalty.
4. liable for breach of the duty of care.

_____6) Daisy is a director of Extra Corporation. At a meeting of the board of directors, Daisy strongly opposes a proposal for Extra to merge with Filler Inc. because the merger would result in Daisy losing her board position and certain private benefits. If the merger would otherwise be an excellent financial deal for Extra, Daisy’s opposition likely:

1. breaches her duty of care.
2. is permitted under the business judgment rule.
3. breaches her duty of loyalty.
4. is permitted because she has no financial interest in Filler.

The French Government announced that it will need to spend 8 billion Euros to repair Notre Dame cathedral. At the same time, the Filipino Government announced it was going to spend 20 million pisos to rebuild a bridge in Manila that was destroyed in a recent mudslide. Economists at the International Monetary Fund have posted data on income and consumption patterns for both France and the Philippines posted below. Based on this data:

1) What will be expected overall GDP growth in France resulting from the Notre Dame cathedral repair?

2.) What will be expected overall GDP growth in the Philippines resulting from the Manila bridge rebuilding project?

3.) Explain why the growth amounts in relation to the project sizes differs for France versus the Philippines.

French Consumption Patterns Per Disposable Income Level:

Filipino Consumption Patterns Per Disposable Income Level:

(B) Discuss the economic policies conducted by policymakers in the United States in response to the spread of COVID-19. Discuss how effective these policies are in dealing with the economic consequences of this event. Use concepts and tools from macroeconomics to support your answer.

International economics                                             Name:____________________

Balance of Payments

1.         Use the table below to answer the following questions.

a.         Classify the transactions below by putting a dollar value in the appropriate column.  Total the columns at the bottom.  The first is done as an example.

b.         Does the U.S. have a current account surplus (inflow of dollars) or deficit (outflow of dollars)?  How much?

c.         Does the U.S. financial account have a net inflow of dollars or a net outflow of dollars?  How much?

            Use the letters in the first column to answer the following questions.

d.         Which transaction(s) represent a remittance?  ________

e.         Which transaction(s) represent a direct investment?  ________

f.          Which transaction(s) represent a U.S. export of goods?  ________

g.         Which transaction(s) represent a U.S. service export?  ________

h.         Which transaction(s) represent a portfolio investment?  ________

i.          What is the total amount of dollar inflows?  __________

j.          What is the total amount of dollar outflows?  __________

York Airlines offers three classes of service on their flights between Toronto and Vancouver: economy, premium economy, and business class. Andrew, a student, is willing to pay a maximum of $300 for an economy class ticket, but is willing to pay up to $100 extra to travel in premium economy or in business class. Rebecca, a successful CEO, is willing to pay up to $500 for an economy class ticket, $800 for a premium economy ticket, and $1,000 for a business class ticket. For simplicity, suppose that York Airlines’ marginal costs are negligible (it has to pay a fixed cost to fly the airplane, but there are no marginal costs per seat sold, regardless of the class of service), so the management of the airline simply wants to maximize revenues.

(a) If the airline could perfectly price-discriminate, what class of service, and at what price, would it offer to each of the travelers? What would be the airline’s total revenues in such a case?

(b) Now suppose that the airline cannot perfectly price-discriminate; they must offer tickets in all classes of service to all customers, and tickets in a particular class of service must be sold at the same price to all customers. Suppose that the airline management decides to charge $300 for economy class tickets, $399.99 for premium economy tickets, and $1,000 for business class tickets. What kind of ticket will Andrew purchase? What kind will Rebecca purchase? What are York Airline’s total revenues?

(c) Suppose that business class tickets go on sale, and their price falls to $790. What kind of ticket will Andrew purchase? What kind will Rebecca purchase? What are York Airline’s total revenues?

(d) Suppose that the airline decides to reduce the cost of business class tickets even further, cutting the price down to $590. What kind of ticket will Andrew purchase? What kind will Rebecca purchase? Is this a good pricing strategy for the airline?

(e) Now suppose that York Airlines decides to get rid of the premium economy seats on their fleet. They maintain their $300 economy class tickets, but increase the price of business class tickets back up to $790. Is this a good strategy for the airline?

1. What is meant by the real exchange rate? What behaviors of the real exchange rate led economists to reject strong versions of PPP?

2. What is meant by a half-life? Why did Rogoff think half-lives are too long?

1. Suppose that the Danish Government wants to reduce the quantity of coconut oil consumption by 23% in order to reach their health improvement goals. How much does the tax need to be in order to meet their goals assuming a price elasticity of demand of 0.5? (Show your calculations for full points)

2. Suppose the Danish Government implements a 50% tax on coconut oil. How much will coconut oil consumption drop by if we assume a 0.5 price elasticity of demand? Will the Danish Government reach its goal of reducing coconut oil consumption by 20%? (Show your calculations for full points)

Suppose the economy is initially at a long-run equilibrium. Then the central bank increases the money supply. Assuming any resulting inflation is unexpected, explain any changes in GDP, unemployment, and inflation in the short-run that are caused by the monetary expansion. Explain your conclusions using three diagrams: (i) one for the IS-LM model, (ii) one for the AD-AS model, and (iii) one for the Phillips curve.

Explain the importance of "indexes"

How does the Federal Reserve stimulate the economy? When faced between continued stimulus to stimulate the economy and the potential inflationary pressure of rising oil prices, what can the Fed do and what do you think the Fed should do?