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Ajax, Inc. assembles gadgets. It can make each gadget either by hand or with a special gadget-making machine. Each gadget can be assembled in 15 minutes by a worker or in 5 minutes by the machine. The firm can also

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The United States is considering adopting a regulation that foreign apples can be imported only if they are grown and harvested using the same techniques that are used in the United States. These methods are used in the United States

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It is a typical Christmas electronics shopping season, and makers of flat-panel TVs are marketing the latest available models through their own Web sites as well as via retailers such as Best Buy and Wal-Mart. Each manufacturer offers its own

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In the Argo Dam study, about 62% of the survey population preferred to take down the dam, while 31% preferred to keep it, and 7% expressed no preference. For those who preferred keeping the dam, the estimated willingness to pay

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a. What is the marginal product of labor for TVs and cars in the Home country? What is the no-trade relative price of TVs at Home?
b. What is the marginal product of labor for TVs and cars in

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Congratulations! You’ve just been appointed chairman of the Council of Economic Advisers in Text land. The mpe is .8. There is a recessionary gap of $400.
a. The government wants to eliminate the gap by changing expenditures. What policy

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Consider two countries, Japan and Korea. In 1996, Japan experienced relatively slow output growth (1%), whereas Korea had relatively robust output growth (6%). Suppose the Bank of Japan allowed the money supply to grow by 2% each year, whereas the

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Consider a world of two countries, Highland (H) and Lowland (L). Each country has an average output of 9 and desires to smooth consumption. All income takes the form of capital income and is fully consumed each period.
a.

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(Appendix 9.B) In some macroeconomic models, desired investment depends on the current level of output as well as on the real interest rate. One possible reason that desired investment may depend on output is that when current production and sales

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Imagine that Gillette has a monopoly in the market for razor blades in Mexico. The market demand curve for blades in Mexico is P = 968 – 20Q, where P is the price of blades in cents and Q is