Shridhara Kollur :- Lesson #1, Assignment #4 Average Cost Minimization. Better Buys, Inc., is a leading discount retailer of wide-screen digital and cable-ready plasma HDTVs. Revenue and cost relations for a popular 55-inch model are: TR MR TC MC = $4,500
Tutorial Chapter 29
a) Medium of exchange, store of value, unit of account
b) Store of value
c) Store of value
When the reserve requirement is less than 100 percent, banks can lend out deposits.
The money they lend out is redeposited
Tutorial Chapter 24
1. The CPI and GDP deflator both rise.
2. The GDP deflator rises, the CPI does not.
3. The CPI rises, the GDP deflator does not.
1. Compute the cost of the basket:
Cost in Year 1
($10 per football x 3 footballs) +
Tutorial Chapter 23
1. Money spent by Debbie is included to consumption. As she spends 200$, GDP
rises by RM200.
2. Saras spending on a new laptop should be included to investment, because
she bought it to produce more goods and services, not f
Tutorial Chapter 35
a) A rise in the natural rate of unemployment shifts the long run Phillips curve to the
right. The economy is initially on LRPC1 and SRPC1 at an inflation rate of 3%,
which is also the expected rate of inflation. The increas
Tutorial Chapter 34 Monetary
a) When the Feds bond traders buy bonds in open-market operations, the
money-supply curve shifts to the right from MS1 to MS2, as shown below. The
result is a decline in the interest rate.
b) When an increase in cre
Tutorial Chapter 33
a) The current state of the economy is shown in figure. The aggregate-demand
curve and short-run aggregate-supply curve intersect at a point to the left of
long-run aggregate supply.
b) A stock market crash leads to a leftwa
Tutorial Chapter 32
a) A reduction in the U.S. government budget deficit would increase national
saving, shifting the supply curve of loanable funds to the right in Figure 3.
This would reduce the real interest rate in the United States, thus i
Tutorial Chapter 31
a) When an American art professor spends the summer touring museums
in Europe, he spends money buying foreign goods and services, so
U.S. exports are unchanged, imports increase, and net exports
b) When students in
Tutorial Chapter 30
a) Nominal GDP = P x Y = 10,000 and Y = real GDP = 5,000, so
P = (P x Y)/Y = 10,000/5,000 = 2.
Since M x V = P x Y, then
V = (P x Y)/M = 10,000/500 = 20.
b) If M and V are unchanged and Y rises by 5 percent, then since M x V