Assume a closed economy. Suppose the incremental capital-output ratio is 3, and the depreciation rate is 4%
Using the Harrod-Domar growth equation, if the savings rate is 9%, what will be the rate of growth? What would the savings rate have to be to achieve 5% growth?
–1%; 27%.
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The Skinned Knee Corporation can produce either 300 skateboards each week or 500 snowboards each week. What is their opportunity cost of producing 300 skateboards each week?
A) 300 skateboards B) 200 snowboards C) 500 snowboards D) 800 snowboards
Jose consumes wallets (q1 ) and a composite of other goods (q2 ). The price of wallets is p1 and the price of other goods is p2 = 1
Jose's utility from wallets depends also on his income—with a higher income, he values a wallet more because he has more to put inside it! His utility is given by the equation U(q1,q2 ) = q1Yq2 Derive Jose's demand for wallets.