Tag: Economics – Others

Real-Time Data Analysis Exercise*
*Real-time data provided by Federal Reserve Economic Data (FRED), Federal Reserve Bank of Saint Louis. Using data from the St. Louis Federal Reserve, analyze the relationship between changes in M2 and inflation. M2SL is the Series ID for the M2 money supply. CPIAUCSL is the Series ID for the Consumer Price Index. Click the following link to view the M2 money supply data from FRED.
(i) Using the Series IDs M2SL and CPIAUCSL, plot the annual percent change in M2 and annual inflation from 1960 to the present.
(i) The change in the M2 money supply for 2014 (shown as 2014-01-01 in FRED) was %. (Round your response to two decimal places.) The inflation rate for 1993 (shown as 1993-01-01 in FRED) was %. (Round your response to two decimal places.)

1 A firm’s ability to earn large profit is constrained by:
the technology or production techniques available.
the prices of inputs used by the firm.
the market price of the good or service sold by the firm.
All of the above
2 Costs that must be paid in the short run even when no output is produced are called:
total costs (TC).
total fixed costs (TFC).
total variable costs (TVC).
marginal costs (MC).
3 In the short run, average variable cost can be obtained by each of the following except:
ATC-MC.
ATC-AFC.
(TC/Q) – (TFC/Q).
TVC/Q.
4 Marginal cost (MC) is:
the change in total cost (TC) divided by the change in output (Q).
the change in total variable cost (TVC) divided by the change in output (Q).
not affected by the level of fixed costs.
All of the above
5 Costs that change as the level of output changes are called:
overhead.
variable costs.
fixed costs.
sunk costs.
6 Which of the following is true for a firm in the short run?
TVC = TC – TFC
TC = TVC + TFC
TFC = TC – TVC
All of the above are true

Sam rents commercial space from Clifford. The lease is for three years. Sam breaches the contract in the 25th month. The balance owed on the lease is $200,000. When Sam vacates he leaves the place in need of repairs. It costs Clifford $20,000 to fix the place in order to show it to prospective tenants. He advertises the space, but nobody signs a lease. Clifford sues Sam for breach of contract. What are the potential remedies?
Caleb has a contract to supply Carson with skateboards for Carson’s shop. Caleb is supposed to deliver the skateboards in 60 days. After a week, Caleb realizes that due to the increased cost of parts he will lose money on the contract. Caleb advises Carson that he will not deliver the skateboards as agreed. Carson may treat the email as:

Create a problem statement
A problem statement can be short — one or more sentences — but should give a sense of what you are trying to achieve (e.g., fix, change, stop or start something) and the broad outcomes you would like.
This was Professor Dyer’s example: “Repurpose abandoned oil rigs in the Gulf of Mexico to support the transition to green energy and to provide opportunities for marine aquaculture.“ Note that it has a specificity about it (it doesn’t aim to make the whole offshore oil industry sustainable), but it is also very open as to how this problem might be solved.
Your first task is to build a problem statement about a current situation Champion Energy Corporation faces relating to sustainability.
Create scenarios around the problem statement
For this step, you will develop three scenarios as part of a narrative for Champion Energy Corporation. These should be a “best case,” a “worst case” and an “in-between” scenario so that the organization understands its risks and opportunities as it makes decisions.
Best case
In-between
Worst case

Two firms are planning to sell 10 or 20 units of their goods. The payoff matrix illustrated at right shows profits when the firms produce simultaneously, the first game tree shows profits when Firm 1 decides how much to produce first, and the second game tree shows profits when Firm 2 decides how much to produce first.
Part 2
How does your analysis change if the government imposes a lump-sum franchise tax of $4040 on each firm?
Part 3
If the government imposes a lump-sum franchise tax of $4040 on each firm, then
Part 4
at least one firm will shut down and produce nothing in each game at the Nash equilibria.
the Nash equilibria for the games will not be affected.
each firm in each game will now have a dominant strategy leading to each Nash equilibria.
each firm will produce more output in each game at the Nash equilibria.
the games will no longer have Nash equilibria.
Part 5
Now explain how your analysis would change if the firms have an additional option of shutting down and avoiding the lump-sum tax rather than producing 10 or 20 units and paying the tax.

American’s tend to be concerned about the nation’s unemployment rate as it has an impact on household’s financial decision-making. A low unemployment rate might encourage consumers to increase their consumption because the economy appears to be solid; in that, folks have good jobs. A high unemployment rate might cause consumers to decrease their consumption as the economy might be at risk for a recession or a downturn. Monthly, the Bureau of Labor and Statistics (BLS) releases to the media and the public the unemployment rate. However, the government has several different unemployment rates; two of which are U-3 and U-6. Match each unemployment rate with its description.
Question 53 options:
This unemployment rate includes discouraged, underemployed, and unemployed workers in the country. In fact many economists view this as the more meaningful rate because it covers a larger percentage of people who are unemployed.
This unemployment rate is the most commonly reported rate in the U.S., representing the number of unemployed people actively seeking a job.
1.U-3 2.U-6

a. The basic determinant of the transactions demand for money is the level of nominal GDP (price level, interest rate, reserve ratio).
b. The basic determinant of the asset demand for money is the interest rate (reserve ratio, price level, level of nominal GDP).
c. Total money demand is the horizontal sum of the transactions demand for money and the asset demand for money.
d. The equilibrium interest rate in the money market is determined at the intersection of the total demand for money curve and the supply of money curve.
Complete the following statement. If there is an increase in the total demand for money:
The equilibrium interest rate will rise.
The money supply will fall.
The money supply will rise.
The equilibrium interest rate will fall.

Tax Policy.
Answer the multiple choice questions below. For each question, only one answer is correct.
6A.
Labor supply elasticity measures
the percentage change in hours worked in response to a percentage change in job postings.
the percentage change in hours worked in response to a percentage change in salary.
the percentage change in salary in response to a percentage change in job postings.
the percentage change in salary in response to a percentage change in the hours worked.
6B.
Suppose we would find conclusive evidence that the current income tax rate is on the decreasing, right-hand side of the Laffer curve. Then, the best policy change would be
to increase income taxes because this would likely lead to higher tax revenue.
to increase income taxes because this would likely lead to more hours worked.
to decrease income taxes because this would likely lead to more hours worked, even though it would also lower tax revenue.
to decrease income taxes because this would likely lead to more hours worked and higher tax revenue.

Match the following explanations of terms and concepts appropriately.
The market demand curve equals the vertical sum of exch consumer’s demand for that good. The efficient level is where the market derrand curve intersects the marginal cost curve = that is, where the sum of the marginal valuations equal the marginal cost.
The free-rider problem occurs because people try to beneftif from public goods ◻ without paying for them. Taveng people according to their marginal valuations of the public good may be efficient, but it may not be fair if the ablity to pay differs. Thus. public goods are more complicated than private goods in terms of what goods should be provided, in what quantities and who should pay.
A stance adopted by voters who tind that the cost of understanding and voting on a ◻ particular issue usually exceeds the expected beneft of doing so.
Al morket activity that goes unreponted to the government either to avoid tawes or ◻ because the activity
These are goverment departments and agencies churged with implementing

a.
More labor inputs can explain in real GDP over the last 65 years or so.
some of the increases
most of the increases
all of the increases
none of the increases
b.
Since at least 1995, the majority of increases in U.S. real GOP are from
labor growth
productivity growth
capital growth
technological change
c.
Rearrange the following contributors to the growth of productivity in descending order of their quantitative importance: economies of scale, quantity of capital per worker, improved resource allocation, education and training, and technological advance.
technological advance, quantity of capital, education and training, economies of scale, and improved resource allocation
improved resource allocation, technological advance, education and training, economies of scale, and quantity of capital
technological advance, education and training, quantity of capital, improved resource allocation, and economies of scale
education and training, technological advance, quantity of capital, economies of scale, and improved resource allocation