Microeconomics
11th Edition
ISBN: 9781260507041
Author: Colander, David
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 23, Problem 1IP
To determine
Determine a decision to take an economic course in terms of cost and benefit.
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Use graph A on the right to determine what happens to the equilibrium values of the interest rate and output when there is
an increasean increase
in government spending (G) with the Fed changing the money supply
(M Superscript S)
by enough to keepby enough to keep
interest rates constantinterest rates constant.
1.) Using the 3-point curved line drawing tool, illustrate the impact of the
increaseincrease
in G. Properly label your curve.
2.) Using the line drawing tool, illustrate the impact of the Fed's money supply decision. Properly label your curve.
3.) Using the point drawing tool, identify the economy's new equilibrium point.
Use graph B on the right to determine what happens to the equilibrium values of the interest rate and output when there is
anan
increaseincrease
in
Upper GG
with no change in
the money supplythe money supply.
1.) Using either the 3-point curved line drawing tool to shift the IS curve or using the line drawing tool to shift the Fed rule…
Some economists argue that the "animal spirits" of investors are so important in determining the level of investment in the economy that interest rates do not matter at all.
Part 2
a. Suppose that this were
truelong dash—that
investment in no way depends on interest rates.
Using the line drawing tool, show what the investment curve would look like. Label the line 'I'.
is my answer correct?
Problem 3
ABC Challenges: Attrition, Balance and Compliance
Can television inform people about public affairs? Political scientists Bethany Albertson and
Adria Lawrence (2009) conducted an experiment in which they randomly assigned people to
treatment and control groups to evaluate the effect of watching TV on a person's information
level. Those assigned to the treatment group were told to watch a specific television
broadcast and were later asked questions related to what they watched. Those in the control
group were not shown the TV broadcast but were asked questions related to the material in
the TV broadcast.
The dataset contains the following variables:
•
•
•
•
•
•
Read News: Dummy variable which =1 if a person reads news and 0 otherwise.
Political Interest: interest in political affairs (not interested=1 to very
interested=4)
Education: years of education
Female: female dummy variable (female=1; male=0)
Income: family income in thousands of dollars
Information Level: information…
Chapter 23 Solutions
Microeconomics
Ch. 23.1 - Prob. 1QCh. 23.1 - Prob. 2QCh. 23.1 - Prob. 3QCh. 23.1 - Prob. 4QCh. 23.1 - Prob. 5QCh. 23.1 - Prob. 6QCh. 23.1 - Prob. 7QCh. 23.1 - Prob. 8QCh. 23.1 - Prob. 9QCh. 23.1 - Prob. 10Q
Ch. 23 - Prob. 1QECh. 23 - Prob. 2QECh. 23 - Prob. 3QECh. 23 - Prob. 4QECh. 23 - Prob. 5QECh. 23 - Prob. 6QECh. 23 - Prob. 7QECh. 23 - Prob. 8QECh. 23 - Prob. 9QECh. 23 - Prob. 10QECh. 23 - Prob. 11QECh. 23 - Prob. 12QECh. 23 - Prob. 13QECh. 23 - Prob. 14QECh. 23 - Prob. 15QECh. 23 - Prob. 1QAPCh. 23 - Prob. 2QAPCh. 23 - Prob. 3QAPCh. 23 - Prob. 4QAPCh. 23 - Prob. 5QAPCh. 23 - Prob. 1IPCh. 23 - Prob. 2IPCh. 23 - Prob. 3IPCh. 23 - Prob. 4IPCh. 23 - Prob. 5IPCh. 23 - Prob. 6IPCh. 23 - Prob. 7IPCh. 23 - Prob. 8IPCh. 23 - Prob. 9IPCh. 23 - Prob. 10IPCh. 23 - Prob. 11IP
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- The figure to the right contains a point indicating the economy's initial price and aggregate output (Upper P 0P0,Upper Y 0Y0) combination. Suppose that the price level rises such that P Subscript 1 > P Subscript 0. Using the point drawing tool, identify a potential location for the economy's new price and aggregate output (Upper P 1P1,Upper Y 1Y1) combination. Label this point B. Using the line drawing tool, draw the aggregate demand curve through these points. Properly label the line. picture is attachedarrow_forwardQuestion content area left Part 1 The figure to the right gives an economy's initial aggregate demand (AD) curve. Using the line drawing tool, show a decrease in aggregate demand. Properly label this line. Part 2 Note: Carefully follow the instructions above and only draw the required object. Part 3 Which of the following will generate a decrease in aggregate demand? A. Increased government expenditures for infrastructure. B. A tax increase. C. An increase in the price level. D. An increase in the money supply.arrow_forwardA movie theater is showing two different movies: a Hollywood blockbuster (with 100 customers willing to pay $10 for a ticket, and 100 willing to pay $8) and an independent film that attracts 50 film buffs, willing to pay $20 each. Marginal costs are zero and neither movie can fill theater capacity. What is the theater's maximum profit if it cannot price discriminate (it must charge the same price for both movies) and if it can price discriminate (it may charge different prices for different movies)? a. $2,000; $2,600 b. $1,500; $2,100 c. $1,500; $2,000arrow_forward
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