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?

1. Inflation and unemployment often move in opposite directions. (6 pts.)
   1. If the government implements an expansionary policy during a recession, what happens to prices and unemployment?

2. If the government implements a contractionary policy during an inflationary period, what happens to prices and unemployment?

3. Are people more willing or less willing to agree with an expansionary period during a recession, or a contractionary policy during an inflationary period? Briefly explain your answer.

2. Briefly explain how spending money on infrastructure or human capital can expand the economy without causing prices to increase. (1 pt.)

how a combination of fiscal and monetary policies can be used to restore an economy to full employment, Economic growth and Balance of payments

What conditions are necessary for price discrimination to take place

Consider a perfect competitive economy with a single good, X, and two factors of production: labour, L, and capital, K. The production function of a representative firm is: X = K^(1/2) L^(1/2) . Production factors and the firm are owned by a single consumer. Assume that labour supply is infinitely inelastic at the quantity L= 16, while the amount of capital is infinitely elastic at the price r=4 (this is the case of a small open economy). Take good X as numerarire, so that Px = 1.

a) Find the level of employment, the wage rate, the price of capital, and national income in general equilibrium

b) Assume that an ad-valorem tax on capital tk =0.2 is established. Find the level of employment, the wage rate, the price of capital, as well as the tax revenue in the new general equilibrium. Who bears the tax burden?

c) Suppose that instead of a tax on capital the government imposes an ad-valorem labour tax that collects the same tax revenue as in (b). Find the new equilibrium (employment and factor prices). Do workers prefer the capital tax rather than the labour tax?

Given: Suppose that 100 risk-averse individuals face a possible insurable health event of $10,000, and their degree of risk aversion is such that they are willing to pay a health insurance premium that is $1,250 higher than their expected healthcare costs. Assume 80 of the people are in low-risk subgroup and have a 25% probability of the event, and the other 20 people are in a high-risk subgroup and have a 75% probability of the event.

Assume individuals and the insurer know the size of the risk groups and the probability of a health event for each risk subgroup, but neither the individuals nor the insurer know which risk subgroup a particular individual is in.

If an insurer will not operate in the market unless its economic profit is greater than or equal to zero and it prices the health insurance premium according to the average for all 100 people (or the sub-group that will buy insurance at the equilibrium price), then the actuarially fair equilibrium premium plus $1,500 in loading charges per insured enrollee will be ____.

Consider an economy with the following components of aggregate expenditure:

Consumption function: C=20 + 0.8YD

Investment function: I = 30

Government expenditures: G = 8

Export function: X= 4

Import function: M=2 + 0.2Y

Tax rate, t = 0.2 or 20%.

Answer the following question.

1. What is the marginal propensity to consume in this economy?
2. What is the equation of the aggregate expenditure function in this economy?
3. Determine the size of the autonomous expenditure multiplier.
4. Determine the size of the tax multiplier.
5. What is the size of the budget deficit at the equilibrium level of income?
6. How much in tax cuts is required to increase the equilibrium level of income by 50.

The monopolistic competition market structure is characterized by:

Question 11 options: Few firms and similar products.

Many firms and differentiated products.

Few firms and a homogeneous product.

Many firms and a homogeneous product.

Which of the following states the law of supply?

Question 13 options:

There is a negative relationship between the price of a good and the quantity offered for sale by suppliers.

There is a positive relationship between the price of a good and the quantity offered for sale by suppliers.

There is a negative relationship between the price of a good and the quantity that buyers purchase.

More of a good is supplied at a lower price.

Which of the following statements are true?

Question 17 options:

Total utility is the satisfaction from the entire consumption of a good.

Utility measures the satisfaction obtained from a good.

Marginal utility is the additional satisfaction from consuming the last unit of a good.

All of the above are true

The Latin expression ceteris paribus means:

Question 29 options:

economic model.

economists are partly right.

If a 2 percent change in the price of a good produces a 10 percent change in the quantity demanded, the elasticity of demand is:

Question 39 options:

Inelastic.

Elastic.

Perfect elastic.

Unit elastic.

everything else being unchanged

partial scarcity is certain.

1. Outline how counter cyclical fiscal policy and balanced budget fiscal policy would close a recessionary gap. Be specific on goals, how each theory would achieve those goals, how they would close the gap, and potential negative effects.

2. According to monetary policy, explain how the Bank of Canada would react to a recession. Be specific on goals, how they would achieve those goals, how they would close the gap, and potential negative effects. 2.According to monetary policy, explain how the Bank of Canada would react to a recession. Be specific on goals, how they would achieve those goals, how they would close the gap, and potential negative effects.

3.Please describe how the PPC curve represents scarcity, choice and opportunity cost.

4.When would a PPC curve be a straight line rather than a curved line?

5.Discuss the differences calculating GDP using the expenditure approach and income approach.