(History of Economic Thought) Question.

Why is division of labor so important for Adam Smith? Make sure that you also observe the connections Smith made between the ‘division of labor’ and the ‘market size’ on one hand, and the effects of this division on the ‘health of the worker’ on the other.

Explain the meaning of monetary neutrality and illustrate graphically that there is monetary neutrality in the long run in the aggregate demand–aggregate supply model. Be sure to label:

i. the axes

ii. the curves

iii. the initial equilibrium values

iv. the direction to which the curves shift

v. the short-run equilibrium values

vi. the long-run equilibrium values.

Explain in words what your graph illustrates.

A consulting engineering firm’s CFO wants to purchase either Ford Explorers or Toyota 4Runners for company principals. The two models under consideration cost $30,900 for the Ford and $36,400 for the Toyota. When considering life-cycle costs, the AOC of the Explorer is expected to be $600 per year more than that of the 4Runner. The trade-in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4Runner. (a) What is the incremental ROR between the two vehicles? (b) Provided the firm’s MARR is 18% per year, which vehicle should it buy? using spreadsheet

Consider the industry in which you are working. (If you are not currently working consider the industry where you worked before returning to school, instead. Or if you never worked before, pick an industry of interest to you.) What were the key forces shaping the nature of competition and the opportunities for making profit in that industry? What, if anything, did firms do to insulate themselves from these forces?

Continuing with the industry you picked above, what were substitutes and complements? How did they impact profits?

Continuing with the industry you picked above, how did supplier power impact profits? What did firms do to insulate from the supplier power, if any?

Q- Grexit or Not?

When the euro was introduced in 1999, Greece was conspicuously absent from the list of the EU member countries adopting the common currency. The country was not ready. In a few short years, however, European leaders, probably motivated by their political agenda, allowed Greece to join the euro club in 2001 although it was not entirely clear if the country satisfied the entry conditions. In any case, joining the euro club allowed the Greek government, households, and firms to gain easy access to plentiful funds at historically low interest rates, ushering in a period of robust credit growth. For a while, Greeks enjoyed what seemed to be the fruits of becoming a full-fledged member of Europe. In December 2009, however, the new Greek government revealed that the government budget deficit would be 12.7 percent for 2009, not 3.7 percent as previously announced by the outgoing government, far exceeding the EU’s convergence guideline of keeping the budget deficit below 3.0 percent of the GDP. As the true picture of the government finance became known, the prices of Greek government bonds began to fall sharply, prompting panic selling among international investors, threatening the sovereign defaults.

Several years into the crisis, the Greek government debt stands at around 180 percent of GDP and the jobless rate among youth is above 50 percent. The country’s GDP declined by about 25 percent. Severe austerity measures, such as sharply raised taxes and much reduced pension benefits, were imposed on Greece as conditions for the bail- outs arranged by the EU, IMF, and the European Central Bank. In addition, people were allowed to have only restricted access to their bank deposits, to prevent bank runs. Opinion polls indicate that the majority of people in Germany, the main creditor nation for Greece, prefer the Greek exit from the euro zone, popularly called Grexit, while some people in Greece are demanding Grexit themselves and restoration of the national currency, the drachma.

Discuss the following points: COULD YOU EXPLAIN IT

Comment

1. What were the socioeconomic issues that caused the economic crisis in Greece in 2010?
2. Through the 2010 crisis, what do you think were the costs and benefits of staying in the euro zone for Greece?
3. What would be the measures that need to be taken to keep Greece in the euro zone in the long run?
4. Would you advise Grexit or not? Why or why not?

The marginal value and average expenditure curves for a market are given by: MV = 90 - 1.5Q AE = .75Q a) Find the equilibrium price and quantity if the market is perfectly competitive. b) Find the equilibrium price and quantity if the market has a Monopsony. c) Find the difference in total surplus between the perfect competition case and the Monopsony case. d) Suppose that the monopsony was publically owned and returns all profits to the public, is the market still inefficient?

A new electronic saw for cutting small pieces of lumber in a furniture manufacturing plant has a cost basis of $4,000 and a 10-year depreciable life. The estimated SV of the saw is zero at the end of 10 years. Calculate the book value for year six using Sinking Fund method where i = 7%.

Summarize the article on incoterms and freight forwarding, Focus on the various incoterms and its impact on freight forwarding.

Article: The Significance of the Incoterms Rules in the Freight Forwarding Services Market

Participate in a discussion regarding marginal benefit and marginal cost. Discuss and share with your classmates the opportunity costs and benefits as a result of your enrollment in college. Also share how you’re planning to maximize your net benefit after receiving your college degree.

define what you would consider an optimal healthcare system (Provide qualitative and/or quantitative criteria)

1) What does the Austrian School of Thought say causes business cycles?

2) What does the Real Business Cycle Theory say causes business cycles?

3) How is the Real Business Cycle Theory different from the Keynesian school of thought?

4) How is the Austrian School of Thought different from the Monetarist school of thought?

5) What are the strengths of the Neoclassical Schools of Thought?

6) What are the weaknesses of the Neoclassical Schools of Thought?

Comment on the importance of inflation for interpreting interest rates.