What is the primary intuition in the Melitz 2003 model of heterogeneous firms from "The impact of trade on aggregate industry productivity and intra-industry reallocations", when moving from autarky to a trade equilibrium.

Refer to the data for a consumer whose income = $12. Assume new product Z is introduced. How many units of Z will this consumer buy, given his or her $12 budget?

Multiple Choice

• zero units

• 2 units

• 4 units

• 6 units

4. According to the open economy macroeconomic model, which of the following statements is (are) correct?
(x) Capital flight requires the cooperation of the country’s airlines to move precious metals to safe areas.
(y) A large and sudden movement of funds out of a country is called capital flight
(z) Capital flight is frequently caused by an increase in political or economic instability.
A. (x), (y) and (z) B. (x) and (y) only
C. (x) and (z) only D. (y) and (z) only
E. (x) only

5. which of the following statements is (are) correct?
(x) When a country suffers from capital flight, the exchange rate depreciates because supply in the market for foreign-currency exchange shifts right.
(y) When a country experiences capital flight its net capital outflow increases and its real exchange rate falls.
(z) When a country experiences capital flight its real interest rate increases as the country’s demand for loanable funds shifts to the left.
A. (x), (y) and (z) B. (x) and (y) only
C. (x) and (z) only D. (y) and (z) only
E. (z) only

According to the open economy macroeconomic model, which of the following statements is (are) correct?
(x) The usual effects of capital flight include a rightward shift of demand in the loanable funds market and a rightward shift of the NCO curve,
(y) Capital flight typically causes a decrease in the domestic interest rate and an increase in NCO.
(z) Capital flight typically causes the real exchange rate of the domestic currency to depreciate because capital flight causes an increase in the supply of the currency in foreign currency exchange markets.
A. (x), (y) and (z) B. (x) and (y) only
C. (x) and (z) only D. (y) and (z) only
E. (x) only

According to Marx, Class is structurally determined – what does this mean? How does Marx’s theory of class relate to history and the present - in your answers explain and discuss class consciousness, false consciousness, and ideology.

Below are data for countries with fast and slow growth rates over two different time periods. Construct a bar chart for each country in both categories. In other words, you will end up with four different bar charts, two for each of the two categories of the countries representing both time periods.

Assume that you are studying a perfectly competitive labour market.

The demand for labour is given by W = 200 – L

The supply for labour is given by W = 100 + L

a) Calculate the wage rate in the market and illustrate in a diagram.

b) If the wages becomes W = 175, what will happen in the market? Explain how the

equilibrium will be reached and illustrate in a diagram.

c) If the wages becomes W = 125, what will happen in the market? Explain how the

equilibrium will be reached and illustrate in a diagram.

d) If the government puts a minimum wage of W = 190, what will happen in the market?

Since consumers' utility depends on their income and prices of goods and services, critically analyze the theoretical notion that a general income tax or subsidy to individuals generates higher utility maximization than the same tax or subsidy on specific products or services.

Consider two countries (Home and Foreign) that produce goods 1 (with labor and capital) and 2 (with labor and land) according to the production functions q1 = L10.5K0.5 and q2 = L20.5T0.5 where Li is the labor input in sector i = 1, 2, K is capital, and T is land.

a. Suppose there is capital inflow from the foreign country so that K increases. How would this affect the marginal product of labor in sector1. (If you do not know differentiation, just substitute numbers into the production function to see what happen.)

b. Assuming the prices of the two goods do not change. How would the capital inflow affect wage? Are the workers better off?

c. How does capital inflow affect the rentals to capital and land?

c. The standard of living in China is higher than the standard of living in Belgium as the size of China’s real GDP in 2018 (using 2010 constant prices) was USD10,800,568.39 million compared to Belgium’s USD538,738.79 million (figures from the World Development Index Database). Do you agree or disagree with this statement? Refer to the UN Human Development Index to Justify your answer.

1. In the country of Classica, we have the following information for the year 2012: *Consumption stood at $1 billion dollars worth of new goods and services, 20% of which were bought by foreigners residing there. *New housing stock worth $100 million was sold. *Company profit totalled $200 million. *Businesses bought $150 million dollars worth of bonds. *The government of Classica bought $200 million worth of guns for the military. *Citizens of Classica living overseas bought $50 million worth of goods from Classica.

i. Calculate and explain how you obtained the figure (i.e. what did you count, and what did you exclude) for Classica’s consumption in 2012

ii. Calculate and explain how you obtained the figure (i.e. what did you count, and what did you exclude) for Classica’s investment in 2012

iii. What was Classica’s GDP in 2012? Explain your answer                   

Amanda, a homeowner, discovers that the crime rate in her neighbourhood is increasing. In fact, it is so bad, the local insurance industry will not sell property insurance with theft coverage to her.

1. Draw a diagram showing the marginal benefit of crime prevention Amanda applies against the marginal cost she incurs. Explain the significance of equilibrium in this model.
2. Draw a diagram showing the impact of increased police surveillance in Amanda’s neighbourhood on Amanda's marginal benefit and marginal cost curves. Explain why equilibrium changes.
3. Show what happens to Amanda's marginal benefit and marginal cost curves in the diagram if she could buy theft insurance. What does this do to her standard of care to prevent theft? Why does the graph shift in the direction it does? Explain what phenomena is at work in the shift. How would a market of such homeowners effect the costs of insurance companies?
4. If the insurer introduces a deductible for theft loss or a loss splitting term into the insurance contract, what effect will this have on the marginal benefit curve of the homeowner? What other contractual terms might be added to minimize the cost of theft to the homeowner? The insurance company? To society?

please explain economic policies in response to the outbreak of Covid-19 in Japan. explain as many and as clearly as possible. What is done by the country to maintain its economy?

1. Suppose Kifwong is a small economy with only five people and two income tax rates. The first $4,000 earned each month are taxed 30%. Anything earned over $4,000 each month is taxed 45%. Anyone who is not working receives unemployment benefits of $2,500, paid for by the government. The table below shows the income for the five people at two different time periods. (5 pts.)

1. Calculate the total tax revenue during the first period

2. Calculate the total tax revenue when the economy during the second period

3. Excluding Billy’s income, what is the percent change between total income in the first period and total income in the second period?

4. Briefly explain how the taxes act as an automatic stabilizer as the income increases from the first period to the second perio

5. Briefly explain how the fact that Billy earned a job in the second period acts as an automatic stabilizer.

What is meant by a “rule of capture”? Why is it efficient? Give three (3) examples, explaining which “rule of capture” applies in each case and whether or not it is efficient or not efficient in each case?