Danny likes to buy books (x₁), and CDs (x₂) with his monthly allowance.

a)     (2) Suppose that books cost $10 each and CDs cost $20 each, and Danny has $200 from his allowance to spend this month. Write down the equation of Danny’s budget line.

b)     (4) Suppose Danny’s utility function is U (x₁, x₂) = 2x₁+ x₂. What can you say about Danny’s preferences for books and CDs. What is Danny’s optimal choice of books and CDs? Show the solution on a graph with the budget line and utility function.

c)     (4) Suppose that additionally Danny’s Mom says that she will buy him 5 books every month. Show how the new budget line (with the gift of 5 books) will look like. What will Danny’s new optimal choice be?

d)     (3) If Danny is able to buy the first 5 books at regular price, all additional books are half price, draw Danny’s new budget line.

The interest rate on 3-year Australia government bonds has been approximately 0.25% since April. Which of the following is the most likely explanation of this near-zero market rate of interest on government bonds?

a. Australia government budget surpluses in recent years.

b. The target cash rate being set at 0.25%.

c. The low level of government debt.

d. Purchases of bonds by the Reserve Bank of Australia on the secondary market.

e. Purchases of bonds by the Reserve Bank of Australia on the primary market.

Suppose you receive the following spot exchange rate quotes from a bank:

AUD/USD 0.65-0.66

You have USD 1,000,000, which you wish to convert into AUD. How many AUD will you be able to purchase?

a. 650,000.

b. 655,000.

c. 1,538,461.

d. 1,515,152.

e. 660,000.

Due to a global economic crisis, the private sector reduces its investment spending and increases its planned saving, so that the private sector financial balance goes from a deficit of 2% of GDP to a surplus of 5% of GDP. The current account balance goes from a surplus of 1% of GDP to a deficit of 2% of GDP. This implies the fiscal balance must go from a ____________ of _________ of GDP to a ___________ of _________ of GDP.

a. surplus; 1%; deficit; 3%.

b. surplus; 3%; deficit; 3%.

c. deficit; 3%; surplus 7%.

d. surplus; 3%; deficit; 7%.

e. deficit; 3%; deficit 7%.

Describe both the costs and benefits of Foreign Direct Investment (FDI) to the home and host countries.

What are the factors of supply

Let C(q) 20 + 4q + 2q2 and demand P(Q) = 212 – 6Q a. Derive the standard monopoly solution b. Derive monopoly profits as a function of the two kinds of taxes: solve for q as a function of the unit tax t and ad valorem tax a. Let t = 6.05 and let a = 0.1. Both taxes generate Q = 12.6 and a resulting consumer price of p = 136.4. Calculate i. Deadweight loss ii. Consumer surplus Producer surplus under the unit taxt Tax revenues under the unit tax t Producer surplus under the ad valorem tax a and compare to undert vi. Tax revenues under the ad valorem tax a and compare to under t

Written Discussion Not everyone chooses to be employed. As the textbook shows, there are a multitude of reasons why people choose (or do not choose) to be unemployed.

Pick one type of worker (or a person you know) who chooses to be unemployed or under-employed and discuss why.

Alternately, you could pick a worker-type who traditionally is not employed and explain why they might choose to work.

Remember to talk about economic theory about unemployment rates (what is U-6?) , supply and demand and what the impact is of those individual employment choices..

Question 2 of 4

Use decimals if needed, not fractions. Do not round at all (without rounding, truncate final answer after three decimal places if needed).

Suppose the demand for union representation is given by R^D=240-4p and the supply of union representation is L^S=2p.

A. Graph the supply and demand for union representation. If union membership is free, the maximum number of workers who would want a union is _______ . If union fees are above $ _______ , zero workers would want to join. In equilibrium, _______ workers will choose to be represented by a union and the fee for being represented by a union will be $ _______ per member.

B. Suppose the government introduces right-to work laws such that workers may receive the benefits of union representation without paying the fees. Some workers who formerly had some willingness to pay for union representation now prefer to be "free riders" on the union services paid by others, and are no longer willing to pay so the demand curve shifts as the aggregate willingness to pay of workers decreases. Suppose the new demand curve is given by L^D=180-4p. Draw this change on your graph. We can interpret this as meaning _________ workers have withdrawn their demand for union representation. As a result, union membership costs $ _______ per worker and _________ workers will choose to be union members.

C. The size of the union ________ (increases/decreases/stays the same) as a result of right-to work laws. The union's total revenue from membership ________ (increases/decreases/stays the same) by $ ________ after the right-to-work laws are introduced.

What exactly is the backbone of an SMS, and why is it so important to the development of a fully functioning SMS? What are the other components? Are they as important as the backbone components of a fully functioning SMS?

In the Great Depression, why did Keynes think about the relative reliability and effectiveness of Fiscal and Monetary policy?

Why do negative externalities, monopoly, and asymmetric information result in bad economic outcomes? What can we do to fix these?

Question 1

Health insurance markets suffer from a large asymmetry of information that leads to adverse selection in the marketplace.

Describe the asymmetric information in the health insurance market. Who is harmed by it?

7. Your government is considering an import tax on a consumer good (imported). Your team is assisting the government in evaluating the welfare impact of the tax. You are the head of the team, and your task is to explain to your team members how the small-country or non-small-country assumptions would influence the result.

9. You are the head of a research team that is assisting your government in evaluating the impact of a global pandemic on the economy. Your task is to explain each step of how to do this job to your team members.