Explain, using the isoquant-isocost diagram, why a rise in the rental rate of capital coupled with n… Show more Explain, using the isoquant-isocost diagram, why a rise in the rental rate of capital coupled with no change in the wage rate will lead to a rise in the price of the capital-intensive good relative to the price of the labor-intensive good. Note: You do not need to draw a graph; just explain what happens on a isoquant-isocost framework. • Show less
Explain what is meant by a zero-sum game, and why it was central to Mercantilist thinking. Then, exp… Show more Explain what is meant by a zero-sum game, and why it was central to Mercantilist thinking. Then, explain how Smith’s idea of absolute advantage altered the nature of the “game.” • Show less
Suppose that, from an initial consumer equilibrium position, the price of one good falls while the p… Show more Suppose that, from an initial consumer equilibrium position, the price of one good falls while the price of the other good remains the same. Using indifference curve analysis, explain howand why the consumer’s relative consumption of the two goods will change. • Show less
Discuss utility and some of the properties about people’s preferences.one is that “more is better “…. Show more Discuss utility and some of the properties about people’s preferences.one is that “more is better “.do you agree that is always the case and if not,do you have an example? • Show less
you were told that a certain cash flow sequence started at $3000 in year 1 and increased by $2000 ea… Show more you were told that a certain cash flow sequence started at $3000 in year 1 and increased by $2000 each year. How many years were required for the equivalent amount worth of sequence to be $12000 at an interest rate of 10% per year?you were told that a certain cash flow sequence started at $3000 in year 1 and increased by $2000 each year. How many years were required for the equivalent amount worth of sequence to be $12000 at an interest rate of 10% per year? • Show less
Suppose a new manufacturing technology results in an expansion in the supply of golf balls in the Un… Show more Suppose a new manufacturing technology results in an expansion in the supply of golf balls in the United States of 15%. If the elasticity of demand of golf balls sold in the U.S. is -0.4, the new equilibrium price will be A 0.375% lower B 16% lower C 37.5% higher D 37.5% lower • Show less
Suppose that the K/L ratio is higher in Germany than in Britain. What would you expect to happen to… Show more Suppose that the K/L ratio is higher in Germany than in Britain. What would you expect to happen to wages in Germany as trade took place between the two countries. Why? • Show less
A company that manufactures ultrasonic wind sensors invested $1.5 million, 2 years ago to acquire pa… Show more A company that manufactures ultrasonic wind sensors invested $1.5 million, 2 years ago to acquire part ownership in an innovative chip-making company. How long would it take (from the date of the initial investment) for its share of the chip company to be worth $3 million if that company is growing at a rate of 20% per year? • Show less
FAL… Show more Carefully explain, for each of the following two statements, why the statement is either TRUE or FALSE. (a) “In a 2x2x2 Heckscher-Ohlin context, when a relatively labor-abundant country moves from autarky to trade, the real return to capital in the import-competing industry decreases and the real return to capital in the export industry also decreases.” (b) “In the ‘specific-factors model,’ with capital fixed in each sector, when a relatively labor-abundant country moves from autarky to trade, the real return to capital in the import-competing industry decreases and the real return to capital in the export industry also decreases.” • Show less
