The short-run aggregate supply curve slopes upward because of the:  

Question 53 options:

Fill in the blanks of the following sentence. When financial markets are ________, leverage ________; when they are ________, leverage ________.

Question 59 options:

f the government decreases the income tax rate, it assumes that:

3) Supply and demand for a competitive labor market for professional hockey players is described by the following equations, where quantity is measured in hundreds: P = 120 – 2Qd P = 20 + 3Qs Draw a graph of this labor market and calculate, and show, the equilibrium salary and quantity of players.

Assume there are 30 teams in a league. What is the effect of roster size per team being limited to 60? What is the effect of roster size per team being limited to 70?

Calculate the change in total surplus if roster size is changed from 60 to 50? As a whole, under which roster size limit are players better off?

Question 1: Assume a new change in technology made using credit cards a lot easier, which caused people to hold less cash.

a) What does this mean for the demand for money?

b) Using the supply and demand for money, can you show what is going to happen to the price level?

c) What can the Fed do in this situation to keep the price level stable? Show it using supply and demand.

Question 2: Suppose there is a recession in the economy that is caused by a sudden change in aggregate demand. a) Show the recession on a graph. What will happen to the price level, output and unemployment? b) Assuming no government intervention, what will happen in the long-run? c) Now suppose the government decides to intervene. What can be done? Is there a trade-off decision in this case? If there is, explain. d) Let’s assume that the recession in the economy was caused by a temporary increase in oil prices which shifts the short-run aggregate supply to the left. What will happen to the price level, output and unemployment? e) Now suppose the government decides to intervene. Is there a trade-off decision in this case? If there is, explain.

Question 1: a) Discuss why the aggregate demand curve is downward sloping. Give at least two reasons. b) Discuss why the short-run aggregate supply is upward sloping using the sticky wages argument. c) Discuss why the long-run aggregate supply is a vertical line? How is this related to monetary neutrality and classical dichotomy?

Think a sector, write whether in that sector according to your opinion, perfectly competitive market form is more desirable then a market with monopolistic competition or the other way around. Explain your view, connecting it to positive and negative characteristics of two market forms. (You can define desirability the way you want)

How can asymmetric information lead to a credit restriction that is mostly faced by local small businesses?

Why does vertical distance between AVC and SRATC gets smaller, as quantity produced increases for a typical company within the mainstram production model?

Show a complete graph for both of these shocks. You will need two graphs only, one for each shock. The graphs have to show:

-The new short run equilibrium immediately after the shock occurs.

-The new long run equilibrium.

-The transition to the long run equilibrium.

Properly label your axes and the curves in your graphs, and use arrows to show shifts of curves and the change in the price level and output.

The two shocks are: The stock market falls in value. Technology makes it cheaper to produce goods like toys and electronics that use plastic.

One of the major developments in late 20th and early 21st century is the IT revolution (emergence of computers and internet). Based on your knowledge as the word citizen (which means you don’t need to know any specific technological knowledge), describe how you think the IT Revolution did affect the cost curves of a typical company, in a sector you choose. Explain your view.

1. Given Q = 560 – 10P and TC = 6000 + 5Q for an oligopolistic firm, determine mathematically the price and output at which the firm:

a. Maximizes its total profits and calculate those profits

b. Maximizes its total revenues and calculate the profits are that price and quantity

c. Maximizes its total revenue in the presence of a $480 profit constraint (20 points)

• Reference Figure 10-6 on p. 442 •

See also Sales Maximization Model on pp. 467-468

• Part (a) is the standard MR = MC procedure.

• For part (b) you are looking for the turning point of the TR function. Note that the derivative of a function measures its rate of change and when a that derivative (the Marginal Revenue) equals 0 it is at its turning point (in this case, maximum)

• The profit constraint for the sales maximizer means that he must earn at least $480 and cannot maximize sales (he will come as close as he can given the constraint). To do this write a total profit equation (TR minus TC) and set it equal to $480

• Solve the equation by turning it into a quadratic equation and use the quadratic formula to find the quantities that satisfy the equation. Since the firm is a sales maximizer, the larger of the two will be the one chosen.

• Hint: Although the question doesn’t require that you find the profit for part (c), you can check to see if you’ve done it correctly by calculating the profit. You set it equal to $480 so it should be $480

What is the problem of a free rider, and how does it relate to public goods? Provide an example of such a problem, and make a couple suggestions on how to mitigate the free rider issue.

- A news article in 2015 noted, ‘A rising number of Greeks in rural areas are swapping goods and services in cashless transactions since the government shut down banks on June 28 for three weeks’ (Karagiannopoulos, 2015). If Greeks were able to swap goods and services for other goods and services, did it matter that currency was not available because the banks had been closed? Briefly explain

- Explain why Australia’s currency is suitable to use as a medium of exchange

8.2 Explain the game theoretic formulation of the Hobbesian and Lockean states of nature based on Axelrod’s Evolution of Cooperation. How do the states differ in the possibilities for cooperative behavior in the absence of government? How do these differences affect the social contracts that members of the societies would voluntarily enter? What does game theory tell us about the role of social contracts in promoting cooperation? You do not need to use precise notation, but you should be as verbally precise as possible.