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Understanding the LM Curve The LM Curve, or the Liquidity Preference Money Supply Curve, is an economic model which shows the relationship between the interest rate and the money supply in an economy. This model is used to understand how
Answer: What Panel of Figure 12.1 Represents a Successful Lobby Action by Intel CEO Pat Gelsinger? The panel of Figure 12.1 that would represent a successful lobby action by Intel CEO Pat Gelsinger is panel C, which shows the increased
Answer: Intel CEO Pat Gelsinger’s Push for US Government Subsidy of Chip Manufacturing Intel CEO Pat Gelsinger is putting pressure on the US government to subsidize chip manufacturing. He has argued that the current reliance on plants in Taiwan and
When the Equilibrium Moves from P1Q1 to P2Q2 The most likely explanation for the changes shown when the equilibrium moves from P1Q1 to P2Q2 is a shift in the demand or supply curve. This shift can be caused by a
Answer: Mr. Jones’s Opportunity to Profit from Chicken Supplies in Mozambique Mr. Jones, an entrepreneur living in Mozambique, saw an opportunity to make a profit by supplying chickens to the market in Mozambique. The slaughtering of millions of chickens in
Answer: The Demand Curve in Mozambique The demand curve in a market is a representation of the relationship between the price of a good or service and the quantity of it that consumers are willing and able to purchase. Mr.
Answer: Mr. Jones’ Opportunity in Mozambique Mr. Jones, an entrepreneur living in Mozambique, saw an opportunity to make a profit by supplying chickens to the market in Mozambique. He argued that the slaughtering of millions of chickens in Mozambique, because
Production Possibility Curve The Production Possibility Curve (PPC) is a graph that illustrates the maximum possible combinations of two different goods that can be produced with a given set of resources. It is used to illustrate the concept of scarcity
What is a Balance Sheet? A balance sheet is a financial statement that summarizes a company’s assets, liabilities, and shareholders’ equity at a specific point in time. These three balance sheet segments give investors an idea as to what the
Answer: Standard Formation Reaction of Gaseous Nitrogen Monoxide The standard formation reaction of gaseous nitrogen monoxide is the reaction of nitrogen and oxygen gases to form nitrogen monoxide. This reaction is represented by the following balanced chemical equation: Balanced Chemical
Balanced Chemical Equation for the Standard Formation Reaction of Solid Water The balanced chemical equation for the standard formation reaction of solid water is 2H2 + O2 → 2H2O. This equation states that two molecules of hydrogen (H2) react with
Answer: Does Immigration Cause the Costs of Innovation to Decline? Immigration has the potential to cause the costs of innovation to decline in the destination country. Immigration can bring an influx of new ideas to a country which can lead
Answer Summary The deadweight loss in the market created by the introduction of a price cap of 12 is 8. Explanation of Deadweight Loss Deadweight loss is an economic concept that describes the reduction in economic efficiency that can occur
Answer The correct answer is option d. B=6Kg, C=2Kg. This is a feasible and inefficient combination as it is on the Production Possibility Frontier (PPF) and does not result in the highest output of either good. What is a Production
Answer: Equilibrium Quantity After Introduction of Specific Tax The market demand for a given good is QD=100 – 2P, while the supply is QS= -10 + 3P, where QD is the quantity demanded, QS the quantity supplied and P denotes
Answer The Production Possibility Frontier (PPF) of a country shows the different combinations of two goods that could be produced with available resources. Option A, an increase in the age at which people retire, will not shift the PPF since
Answer An increase in the demand for a normal good is caused by a decrease in the price of a substitute good. When the price of a substitute good decreases, consumers tend to substitute that good for the normal good,
Answer: What is the Short Run Total Cost Function of a Firm? The short run total cost (STC) function of a firm is a formula used to calculate the total costs of producing a certain quantity of a good or
Answer: Average Cost of Production at Q=20 The total cost of producing a quantity of Q is given by the equation TC(Q) = 20Q2 + 10Q. When Q = 20, the average cost of production (AC) is the total cost
Answer The consumer surplus will increase by 450. Explanation The consumer surplus of a good is the difference between the maximum price a consumer is willing to pay and the price they actually pay. In this case, the market demand
Answer: The UK and US Comparative Advantage in Cheese and Wine Production The UK and the US have different abilities to produce either cheese or wine, depending on the number of workers employed. The UK can produce 1 kg of
Answer The correct answer is b. Average cost of production is constant. Constant returns to scale means that when only one factor of production (capital or labor) is increased while the other is held constant, the production output increases proportionately.
Answer: Deadweight Loss Deadweight loss (DWL) is an economic term for when a market is unable to reach its efficient equilibrium due to an external intervention. In this case, the external intervention is the introduction of a specific tax t
Answer Deadweight loss is the decrease in economic surplus that results from an inefficient allocation of resources. In the given question, the market demand for a given good is QD=100 – 2P, while the supply is QS= -10 + 3P,
Answer The deadweight loss in the market created by the introduction of the price cap of 12 is 180. This is calculated by subtracting the consumer surplus and producer surplus in a competitive market from the welfare of a monopolistic
Answer: Half-life of Radioactive Isotope The half-life of a radioactive isotope is the period of time it takes for the activity of the sample to be reduced by half. In this case, the sample had an activity of 4.0 x
What Happens When Market Supply is Perfectly Elastic? When market supply is perfectly elastic, an increase in market demand will result in an increase in the equilibrium price and an increase in the equilibrium quantity. This is due to the
Answer The half-life of the isotope is 7 days. This is determined by taking the initial activity of 4.0 x 106 Bq and dividing it by the final activity of 1.1 x 103 Bq and the result is 36.36. The
Answer: Marginal Productivity and Cost The marginal productivity of labour and capital are 10 and 20, respectively. This means that the productivity of one additional unit of labour and capital are 10 and 20. The price of labour and capital
Answer The correct answer is D. Jennifer has a comparative advantage in making pizzas compared to Billy. This means that Jennifer is more efficient in making pizzas than Billy is. Comparative advantage is based on the opportunity cost of producing
Solution The market demand for a given good is QD=100 – 2P, while the supply is QS= -10 + 3P, where QD is the quantity demanded, QS the quantity supplied and P denotes the price. When the Government introduces a
Answer The correct answer for the given cost function is C. The average cost decreases as Q increases. Explanation The given cost function is STC(Q) = 10Q + 100, where Q is the quantity of output. The average cost is
Answer: Average Cost of Production The total cost function of a firm is TC(Q) = 20Q2 + 10Q, with Q being the quantity produced by the firm. When the firm produces a quantity of 20, the average cost of production
Answer The consumer surplus increases by the area of the triangle, which is (1/2)(20 – 30)(100 – (20 + 30)) = 500. Consumer surplus is defined as the difference between the highest price a consumer is willing to pay and
What is Laylat al-Qadr (the Night of Power)? Laylat al-Qadr (the Night of Power) is a night of special significance in the Islamic faith. It is believed that on this night, the first verses of the Quran were revealed to
Answer The table provided is a representation of the producer revenues, costs, and profits in perfect competition. The table contains information regarding the quantity (Q), price (P), total revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC), total
Answer Payback period adalah waktu yang diperlukan untuk mengembalikan dana investasi yang telah ditanamkan. Dalam kasus ini, usulan proyek investasi dengan dana Rp. 500 juta memiliki payback period 4 tahun. Definisi Payback Period Payback period merupakan jangka waktu yang diperlukan
Question 4 and 5 Answer The Figure below relates to the short-run monopoly equilibrium of Sarah’s bakery. The correct answer to question 4 is C, R280. This is the monopolist profit per unit. The correct answer to question 5 is
Answer: Summary: The Figure given relates to the short-run monopoly equilibrium of Sarah’s bakery. The monopolist profit per unit is equal to R250 and the total cost of the monopolist is equal to R45 000. Monopoly Equilibrium of Sarah’s Bakery
Answer: Sarah’s Monopoly in the Short-Run Sarah is the sole provider of a unique pastry in her small town, giving her a virtual monopoly and significant market power. She can set the price at a level that maximizes her profits