the cost function for a firm with a Cobb-Douglas production function  y = x₁^ax₂^b   can be written as c(y) = Ky^1/(a+b).

a) Demonstrate that if  a+b < 1 the firm’s long-run average and marginal cost functions must be increasing in y.

b) Demonstrate that if  a+b = 1 the firm’s long-run average and marginal cost functions will not be increasing in y but instead will be constant.

Please show work, don't just put it in excel: A firm will choose one of two projects. Both projects have useful lives of 10 years. Project A has an initial cost of $10,000, annual fuel cost of $500 per year, maintenance cost of $100 at the end of year 1 that increases by $25 per year thereafter, a salvage value of $1,000, and annual benefits of $2,300. Project B has an initial cost of $13,000, annual fuel cost of $400 per year, maintenance cost of $100 at the end of year 1 that increases by 10% per year thereafter, a salvage value of $2,000, and annual benefits of $2,500. Evaluate the present worth using an interest rate of 8 percent, compounded annually.

1.What is the present worth of project A ($)?

2.What is the present worth of the annual benefits for Project B ($)?

3.What is the present worth of Project B ($)?

4.Suppose that Project A has a present worth of $1,294 and that project B has a present worth of $1,105 (these are not the correct answers to prior parts of the problem), which project is preferred?

5.Suppose that the interest rate is 6.7 percent. At this interest rate, what is: 1. the net present value of Project A ($)? 2. the net present value of Project B ($)? 3. from an engineering perspective, is there any significant difference in the present value of these two projects (y/n)?

Compare and contrast the approaches of Smith, Ricardo, Marx, Veblen, and Schumpeter to an understanding of “the machine” or capital and its development? How does their approach to the machine support their view of economic society, specifically class structure?

Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.

Choices for each

-(a) Consumer Surplus

-(b) Producer Surplus

-(c) Neither

(1) Even though I was willing to pay up to $43 for a used laptop and even though the seller was willing to go as low as $32 in order to sell it, we couldn't reach a deal because the government imposed a price floor of $49 on the sale of laptops.

(2) I sold a jersey sweater for $34, even though I was willing to go as low as $25 in order to sell it.

(3) Even though I was willing to pay up to $49 for a used textbook, I bought a used textbook for only $43.

Locate a recent article (published within the last year) that includes values for the key economic factors. You can use the Hunt Library, newspapers, new stations, or other credible sources to locate an article. Analyze your selected country's economic well-being. Include the following in your discussion.

• Discuss how nominal and real GDP for your selected country are affected if there is a decrease in taxes and an increase in interest rates.
• Identify and discuss at least six economic indicators for your selected country.
• State the relationship between GDP, net domestic product (NDP), national income (NI), personal income (PI), and disposable income (DI).

Describe the basic types of financial decisions firms have to make? Give an example of each

2. Use the data provided below and calculate:

1. Nominal GNP for 2014 and 2015.
2. Assuming 2014 is the base year, calculate price index for 2015.
3. Real GNP for 2014 and 2015.
4. Inflation rate from 2014 to 2015.
5. Real and nominal rates of economic growth from 2014 to 2015. (Note, rate of change is measured by “absolute change” from one year to another divided by what the GNP was in the previous year.

What is the role of the contemporary partisan think tank in U. S. politics and policy formation today? (250 words please)

Explain with examples (at least 3) of arbitrage in exchange rates.

Explain that metaphor:

A Surplus is like Profit.

Topic 8 Spending and Output in the Short Run

8.1 Explain the errors of the following arguments made by an economicsstudent:

a) “The textbook said that a higher interest rate lowers investment, but that doesn’t make sense. I know that if I can get a higher interest rate, I am certainly going to invest more in my savings account.”

b) “The newspaper said that the recent recession was caused by a decline in investment. This can’t be true. If there had just been a decline in investment, the only firms hurt would have been construction firms and other firms selling investment goods. In fact, many firms experienced falling sales during that recession, including department stores and firms selling consumer electronic products.”

8.2 Company A in country X is considering the investment in a project with the following (estimated) cost and benefit. The project has a life of 3 years and has zero value after the third year.

a) Suppose in year 0 Company A could borrow or lend at an annual interest rate of 4%. Explain clearly with calculation whether Company A will invest in this project.

b) Based on your answer in part (a) explain how an increase in interest rate to 5% will affect Company A’s investment decision.

c) There is a concern about the unemployment problem in country X and the lack of investment demand is regarded as one of the major reasons of unemployment. Suppose other firms in country X will be affected in the same way as Company A as described in part (a) and (b) above. Use the Keynesian model to explain the process of how a change in interest rate may help to solve the unemployment problem.

8.3 Consider the following Keynesian model: Consumption:

C = 200 + 0.7Yd

Lump-sum tax: T0 = 50

Proportional Tax Rate: t = 0.2

Government Expenditure: G = 435

Planned Investment: I = 300

Exports: X = 100

Imports: M = 0.06Y

Yd: Disposable Income

Numbers are in billion dollars.

a) Each row corresponds to one possible output level. Fill in the remaining columns of the table given the equations given above.

b) What is the equilibrium output level of this economy?

c) What is the level of unplanned investment at the output level of 1500 and at the level of 15 2500? If it is not in equilibrium, describe how the economy would adjust to the equilibrium in each case.

d) What is the change of equilibrium output when government expenditure increases to 560? Explain your steps. What kind of policy is it?

e) If investment decreased to 175 billion dollars under policy uncertainty, how does it change the equilibrium output level? Is the change in equilibrium output larger than the change in investment? Why?

f) What factors would affect the size of expenditure multiplier? Briefly explain

explain how the banking system 'creates' money independent from the amount of currency in the economy. In your own words indicate whether this is a major or minor source of money in the economy and whether you think it compares today vs 20 years ago vs how important it might be 20 years in the future. (Is the role of the banking system consistent over time or evolving? If evolving where is it heading, if its not evolving, why has it remained stable over time?)

1. Consider Consumers A, B, and C with the following preferences over two goods.

U_A (x₁,x₂) = x₁²x₂³

U_B (x₁,x₂) = 2x₁+3x₂

U_C (x₁,x₂) = min{2x₁,3x₂)

The prices given are p1, p2 and income for each consumer is m.

Solve for the Engel curves for each consumer.

please be very detailed, thank you!

How did the 2008 financial crisis affect the united states employment rate ( 500 Words )