Construct a personal strategy for communicating effectively in small group decision making. How do you plan to ensure you use this strategy?
In: Economics
In: Economics
Here are some hypothetical numbers used to illustrate the ideas
of trade-offs, specialization, and comparative advantage. Assume
Sri Lanka, using all her resources efficiently, can produce either
2,000 bags of rice OR 6,000 bags of tea. Let's also assume that,
using all her resources efficiently, Kenya can produce either 2,000
bags of rice OR 2,000 bags of tea. Further, assume that the
countries have similar resource endowments and that, initially,
they are not trading with each other. Therefore, each of the
countries has to produce both rice and tea for its citizens.
Suppose that, in the no-trade situation, Sri Lanka was consuming
800 bags of rice and 3,200 bags of tea, and in the no-trade
situation, Kenya was consuming 1,000 bags of rice and 1,000 bags of
tea.The trading price is set at one bag of rice for two bags of
tea, and Kenya wishes to keep at least 1,100 bags of rice after
trade. Determine if there is any benefit (in terms of increased
consumption possibilities) for Sri Lanka and Kenya if they trade
with each other.
I can't figure out this problem and I don't really know where to
start, thank you!
In: Economics
Myth of income inequality in US
Although US is the largest economy in the world, some says it is one of the worst income inequal countries among the industrialized countries and Income inequality in US is not improving.
Q1) Does this claim have any truth in it? If so, discuss it with specific economic data.
Does the new Trump Tax cut make income inequality worse? Does lock-down due to COVID-19 hurt the low-income class more than the high-income class?
Q2) Some says, “In US, the upper class is doing better, the middle class is disappearing and more people are living under poverty.”
If so, what is the social, economic and psychological consequence from growing income inequality?
Q3) Some says US government should do something to reduce the gap between the poor and the rich? Do you agree or not?
Q4) If so, is it a good idea to raise more tax from the wealthy and provide more welfare safety nets to the poor, or increase of minimum wage, or free higher education with Government subsidy or universal basic income?
Q5) Is any better idea of government policy over this matter? since middle class struggles with heavier consumer debt due rising rent cost, medical cost, and education cost, and job insecurity due to automation.
In: Economics
In: Economics
What is a product portfolio and do your Recycling, Phone, and Fetometer companies have one? Under what conditions would you eliminate a product from your portfolio? And, describe how you might implement a strategy of "product phasing".
In: Economics
a) Suppose the money supply increases. If the demand for money curve remains the same, show what will happen to prices of goods and the PPM and explain. Use a graph to illustrate. Clearly label your graph.
b) Suppose that at the same time the supply of goods increases, and overall, prices have risen. What has happened? Draw a new PPM graph illustrating your point and explain. Clearly label your graph.
In: Economics
With the aid of a diagram, explain why according to economic theory, in the short run rational firms should only be operating at Stage two of production.
b. Why is it not rational for firms to operate at Stage one or Stage three of production?
c. The impact of COVID-19 has the CEO of a small manufacturing firm worried because of the reduced demand for its product has resulted in reduced production. She has asked you to explain how this will affect the firms fixed, variable, average and marginal costs ( 5 marks) .
In: Economics
Using a graph and in your own words, explain how a change in open market purchases affects money supply and the nominal interest rate.
In: Economics
This is an exercise on moral hazard in credit markets. Assume that a borrower must borrow 100 for an investment. The borrower can choose between a safe project yielding a return of Rs with 100% probability and a risky project yielding a return of Rr with probability pr and a return of 0 with probability (1-pr). Assume that the lender cannot observe or control the type of project chosen by the borrower. What are the conditions for the borrower to choose the risky over the safe project under limited liability? What is the minimal level of collateral that will lead the borrower to choose the safe project instead? Alternatively, assume that the borrower has some money of his or her own to invest in the project that costs 100. Assuming that the bank cannot collateralize the loan, what is the maximum amount of the loan such that the borrower will prefer the safe project over the risky project?
In: Economics
A real estate investor has the opportunity to purchase land currently zoned as residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (in thousands of dollars) are shown in the following payoff table:
| State of Nature | ||
| Rezoning Approved | Rezoning Not Approved | |
| Decision Alternative | s1 | s2 |
| Purchase, d1 | 640 | -200 |
| Do not purchase, d2 | 0 | 0 |
| (a) | If the probability that the rezoning will be approved is 0.5, what decision is recommended? | ||||
| Recommended Decision: - Select your answer -PurchaseDo not purchaseItem 1 | |||||
| What is the expected profit? Enter your answer in thousands dollars. For example, an answer of $200 thousands should be entered as 200,000. | |||||
| $ | |||||
| (b) | The investor can purchase an option to buy the land. Under the option, the investor maintains the rights to purchase the land anytime during the next three months while learning more about possible resistance to the rezoning proposal from area residents. Probabilities are as follows: | ||||
| Let H = High resistance to rezoning | |||||
| L = Low resistance to rezoning | |||||
| P(H) = 0.51 P(s1 | H) = 0.16 P(s2 | H) = 0.84 | |||||
| P(L) = 0.49 P(s1 | L) = 0.85 P(s2 | L) = 0.15 | |||||
| What is the optimal decision strategy if the investor uses the option period to learn more about the resistance from area residents before making the purchase decision? | |||||
|
|||||
| (c) | If the option will cost the investor an additional $10,000, should the investor purchase the option? Enter your answer in thousands dollars. For example, an answer of $200 thousands should be entered as 200,000. | ||||
| - Select your answer -YesNoItem 5 | |||||
| Why or why not? | |||||
| The input in the box below will not be graded, but may be reviewed and considered by your instructor. | |||||
| What is the maximum that the investor should be willing to pay for the option? | |||||
| EVSI = $ |
In: Economics
Assume that an economy’s long-run equilibrium is described as follows: economic growth at 2.5% pa, the natural rate of unemployment at 6% and expected inflation at 2%.
Using large AD/AS and Phillips curve diagrams, illustrate the short-run effects of the policy or event on the economy. Assume the price level is not sticky.
Starting position : Long-Run equilibrium
Policy/event : increasing interest rates
In: Economics
How does an increase in inflation affect the nominal exchange rate
How consistent is the Keynesian consumption function with the random walk hypothesis
Use Tobin's q theory and the neoclassical theory of investment to explain why investment rises so rapidly once the economy has passed the trough of a business cycle
In: Economics
In: Economics
Why is the long-run Aggregate Supply (LRAS) Curve a vertical line? What causes it to shift?
In: Economics