Explain the potential ambiguity in the effect of exchange rate changes on the balance of trade. How does the Marshall-Lerner condition clarify the nature of this ambiguity?
                                                                                                                                   
                                                                                                                                    [26 marks]

Assume that you are told that because of some changes, the equilibrium price increased but it is unknown if the equilibrium quantity increased, remained the same, or decreased. Which of the following would be consistent with this outcome?
a. There was a decrease in input costs and consumers expected lower income.
b. Consumers expected a lower price and firms expected a higher price.
c. There was a decrease in income (the good is inferior) and a decrease in the number of firms.
d. There was a positive change in consumer tastes and an increase in productivity.

When demand is _______ consumers are _______ to price changes and the price elasticity of demand is _______.
a. elastic, relatively sensitive, greater than one (in absolute value)
b. inelastic, completely insensitive, equal to one (in absolute value)
c. inelastic, relatively sensitive, less than one (in absolute value)
d. unit elastic, hyper-sensitive, equal to zero
e. perfectly elastic, hyper-sensitive, equal to one (in absolute value)

The price elasticity of demand for sandwiches at a deli is estimated to be 1.75 (in absolute value). This means that the demand for the sandwiches is _______ and for any given percentage change in price (in absolute value), the percentage change in quantity demanded will be _______ (in absolute value).
a. elastic, smaller
b. elastic, larger
c. inelastic, smaller
d. inelastic, larger

If demand is inelastic, a change in the selling price causes no change in the quantity demanded.
a. True
b. False

Which of the following is not correct about a price ceiling?
The amount of the good or service bought and sold under a price ceiling is less than the equilibrium quantity.
a. A price ceiling creates a persistent surplus.
b. Price ceilings cause underinvestment in the industry.
c. For it to be effective, a price ceiling is imposed below the equilibrium price.
d. Black markets often develop when a price ceiling is in place.

1. One of the largest changes in the economy over the past several decades is that technological advances have reduced the cost of making computers.
2. 1. Draw a supply-and-demand diagram to show what happen to price and quantity in the market for computers.
   2. Forty years ago, students used typewriters to prepare papers for their classes; today they used computers. Does that make computers and typewriters complements or substitutes? Use a supply-and-demand diagram to show what happen to price and quantity in the market for typewriters. Should typewriter producers have been happy or sad about the technological advance in computers? Give a reason for your answer.
   3. Are computers and software complements or substitutes? Draw a supply-and-demand diagram to show what happen to price and quantity in the market for software. Should software producers have been happy or sad with about the technological advance in computers? Why/why not?
   4. Does this analysis help explain why software producer Bill Gates is one of the world’s richest people?

1. What are the major changes in Africa, as it becomes a major emerging market? With brief historical evidence, discuss the role of China in African development.
2. Describe your understanding of the “New Scramble for Africa”. Discuss how the process of globalization affects Africa’s development. Why is Africa referred to as a ”hopeful continent”?

500words short answer

In an IS-LM model, if we assume that money demand is completely insensitive to changes in the interest rate

A.) interest rates cannot be lowered by fiscal policy

B.) fiscal policy can neither change the level of output nor the composition of GDP

C.) monetary policy can change income

D.) monetary policy is totally ineffective in changing the rate of interest

E.) the economy cannot be stimulated by fiscal or monetary policy

Describe why the sound of an oncoming siren changes as it passes you on the street. Please include terms such as blue and red shift. What is one way this is used in astronomy?

(a) Use a graphical approach to explain the effect of the following changes.

i. A new Covid 19 face mask, made in America, is successful in sales to canada.

   ii. canada reduces its interest rate compared to the U.S., causing investors to sell canada’s bonds and buy U.S. bonds.

iii. Canadians, unhappy with monetary unification, transfer their bank balances to the U.S.

Louis C.K. and other comedians try to subvert the Ticketmaster monopoly, there will be changes to the market for standup tickets. You will draw and explain this market conversion. In your first graph, begin with a market that is in monopoly as dominated by Ticketmaster. Depict the price and quantity (e.g. you’ll need a MR curve, a demand curve, MC/supply curve, and any consumer and producer surplus and deadweight loss). Then, in the next graph, depict the market as it becomes perfectly competitive. Depict how price and quantity change (e.g. this graph should display the monopoly price and quantity, then you should show the competitive price and quantity for comparison, as well as the new areas of consumer and producer surplus and deadweight loss). Make sure you’re clear on the graph and in your answer about what happens to price and quantity as the monopoly market is converted to perfect competition by Louis C.K.’s action (e.g. what increases, what decreases?). Also, make sure you make a clear statement about changes in efficiency (e.g. how consumer surplus, producer surplus, total surplus, and deadweight loss change)

a) What are the assumptions about the competitor's reaction to the price changes underlying the shattered demand curve of the oligopoly?

(b) Why is there a break in the oligarch's marginal revenue curve?

(c) How does the model of the sloping demand curve explain the rigidity of prices in the oligopoly?

(d) What are the disadvantages of this model?