Category: Economics

Suppose Dell is currently selling 2,000,000 computers per year. However, managers at Dell are considering whether to increase production by 200,000 computers. One manager explains that after increasing production by this amount, total profit would be $100 million. Given this information, should Dell increase production by 200,000 computers?
A. Information about the additional cost incurred from producing 200,000 additional computers is required to answer this question.
B. Information about the additional revenue earned and the additional cost incurred from producing 200,000 additional computers is required to answer this question.
C. No, because increasing production by 200,000 computers would decrease the price of computers.
D. Yes, because Dell would earn a profit.
E. Information about the total revenue earned and the total cost incurred from producing 2,200,000 computers is required to answer this question.

Consider a world with a home country H and a foreign country F, both populated by L consumers who can only supply their labor domestically. Every consumer has one unit of labor and consumes goods indexed by ω in [0,1]. Preferences are such that a consumer with income x facing prices {pω}ω in [0,1] chooses to consume {cω}ω in [0,1] according to ∫0u pω cω dω = B(u) x where B(*) is a strictly increasing function with B(0)=0 and B(1)=1. Let V(*) be the inverse of B(*), so that b = B(V(b)) for all b in [0,1].
All goods are produced using linear labor-only technologies, with productivities {zω,j}ω in [0,1] in country j in {H,F}. The goods are ranked so that A(ω) = zω,H / zω,F is strictly decreasing, and A(0) = ∞ while A(1) = 0. International trade is subject to transportation costs: if one unit of good ω is shipped from country j to the other country, only δj < 1 units arrive. Write {pω,j}ω in [0,1] for goods prices and wj for wages in country j, all expressed in some common unit

Peso’s PartyIt was bad enough when Canada’s Loonie surpassed the dollar, but now the Mexican peso is gaining on the greenback, too. In Apeil, the peso hit 1044 to the dollar, is best rate in two years. Mexico’s 4.2 percent GDP growth in January and February finally corvinced currency investors that the peso shouldn’t be tethered to the dollar, as it has been in recent years. At current levels, exports might soon become more expensive for gringos in other words, time to slock up on Coronas.Fortune, May 12, 2008
Why might Mexican goods become more expensive to U.S consumers?
the U.S dollar appreciates when the Mexcan peso appreciates
an appreciation of Be Mexcan peso against the U.S. dollar moans that the U.S dollar depreciates aganst the Mexican peso
The Mexican econemy is growing at a quicker pace than the U.S economy
the US dollar depreciates when the Mexican peso depreciales

Assume that the Argentine central​ bank’s assets consist of 100 percent of​ interest-bearing U.S. Treasury bonds. If Argentina gave up its peso and dollarized its economy​ completely, what and how much does it​ sacrifice?​(​Hint:Think through the actual steps Argentina should have to take to dollarize itseconomy​.)
Part 2A.
The Argentine central bank loses completely its power to control the money supply.
Since Argentina already operates a currency board holding U.S. bonds as its​ assets, dollarization would not impose any further cost.
There is no real loss. Argentina can trade the U.S. bonds it holds for dollars to use as currency and any expansion of of the money supply can be obtained by sending real​ goods, services, or assets to the U.S. for​ dollars, which can cahed in for goods and services from the U.S. whenever it wants.
Argentina loses interest by holding​ non-interest bearing dollar bills instead of​ interst-earning U.S. treasury bills.

The United States has imposed a tariff of 38% on radial car tire imports from China. The tariff caused imports of tires to drop precipitously after only a few months. Additionally, the price of tires rose significantly after only a few months.
3rd attempt
Part 1(1 pt)See HintWho benefited from this tariff?Choose one or more:
A.non-Chinese foreign radial car tire producers
B.U.S. radial car tire producers
C.U.S. radial car tire consumers
D.Chinese radial car tire producers
Part 2(1 pt)See HintNow suppose that the United States increases the tariff to 75% on radial car tire imports from China. Which of the following is likely to occur in the United States?Choose one:
A. The average radial car tire price will increase.
B. Only tires imported from non-Chinese foreign producers will increase in price.
C. Only tires produced in China will increase in price.
D. Only domestically produced tires will increase in price.
E. The average radial car tire price will stay the same.

In a congressional district somewhere in the U.S., a new representative is being elected. The voters all have one-dimensional political views that can be neatly arrayed on a left-right spectrum. We can define the ”location” of a citizen’s political views in the following way. The citizen with the most extreme left-wing views is said to be at point 0 and the citizen with the most extreme right-wing views is said to be at point 1. If a citizen has views that are to the right of the views of the fraction x of the state’s population, that citizen’s views are said to be located at point x. There are two candidates for the congressional seat and they are forced to publicly state their own political position simultaneously on the zero-one left-right scale. 1.a (2 points) Suppose voters always vote for the candidate whose stated position is nearest to their own views and suppose each candidate cares only about getting as many votes as possible.