In-Class Exercise #2
A condominium community consisting of three members (Peter, Paul, and Mary) is
considering the following three proposals:
G: hiring a gardener
S: hiring a security guard
P: installing a pool and hiring a pool service.
In-Class Exercise #6 Answers
Suppose that an economy produces two goods, X and Y, whose demands are given by:
QX = 5 - .25PX
QY = 40 5PY
Both X and Y can be produced at a constant average and marginal cost of $4 per unit.
In order to rai
In-Class Exercise #1 Answers
The economy consists of two individuals, A and B, with demands for good X
QA = 30 3P
QB = 20 (2/3)P
The marginal and average cost of producing good X is a constant $18 regardless
of how much is prod
In-Class Exercise #3 Answers
Because nonresidents benefit from local government public safety services, suppose
that the federal government offers localities a public safety grant equal to $1 for $1 of
local tax money spent on public safety
In-Class Exercise #4
Suppose the demand and supply for a good are given by
QS = 500P and QD = 4500 1000P
A tax of $0.60 per unit sold is imposed on sellers in this market.
Sketch a graph showing values for equilibrium price and quantity
In-Class Exercise #5
Assume that there are two states, A and B. The value of marginal product of capital
in state A is given by
VMPA = rA = 20 0.25 KA,
Where KA is the amount of capital invested in state A, and the value of the marginal pro
All your questionsanswered!
What might lead a
country to export goods?
What might lead them to
The facts that countries import many goods
and services yet must produce a large quantity
of goods and services themselves to enjoy a