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Suppose that when income increases by 10%, the quantity demanded of gasoline increases by 3%.
a. What is the income elasticity of gasoline?
b. Based on your answer, is gasoline a normal or inferior good? Is it a necessity or a luxury?
Business Economics, Economics
Suppose demand and supply are given by: Q d x = 14 - 0.5 P x and Q s x = .25 P x - 1 a) Determine the equilibrium price and quantitiy. b) Suppose a $12 excise tax is imposed on the good. Determine the new equilibrium ...
Why would the communities in the territories not be listed for government transfer payments? Why do cities and towns get government transfer income?
Consider the market for small business loans. In the context of this market. How adverse selection impact lenders. How does adverse selection impact borrowers? In the context of this market provide 2 things that a lender ...
Discuss three ranges of the aggregate supply curve. Explain changes in the AD-AS macroeconomic equilibrium due to the aggregate demand shifts and due to aggregate supply shifts. Apply the AD-AS model to the two types of ...
In the summer of 2013, Walt Disney released The Lone Ranger, starring Johnny Depp and produced by Jerry Bruckheimer. The film bombed at the box office: Worldwide, it earned about $245 million in revenue, well below the $ ...
An article in The Wall Street Journal noted that an" increase in the price of crude oil quickly reduces demand for oil". Do you agree with this statement? Briefly explain.
Suppose that Third National Bank has reserves of $20,000 and check able deposits of $200,000. The reserve ratio is 10 percent. The bank sells $20,000 in securities to the Federal Reserve Bank in its district, receiving a ...
You take out earthquake insurance on your home. The annual premium is $600. In case of an earthquake the company will pay you $400,000. The probability of an earthquake in your area is 0.0002. What is the expected value ...
What are the four main points of difference in terms of utility, value, rationality, and equilibrium between the classical and neoclassical schools of thought? Briefly describe each one.
Find the probability that 4 randomly selected people all have the same birthday, given that all of them were born in September. Ignore leap years.
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Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate
Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p
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