If the Fed buys $32 billion of U.S. bonds in the open market and the reserve requirement is 10 percent, M1 will eventually

2.You are selling your 1996 Mustang. You have already spent $1000 on repairs. At the last minute, the transmission dies. You can pay $600 to have it repaired, or sell the car "as is."

A.) What is the marginal cost of fixing the transmission?

B.) What is the marginal benefit of fixing the transmission if the Blue book value for the car is $6000 if the transmission works, $5500 if it doesn't?

3.Suppose the government engages in over production of a good. What are the likely effects on the private production of other goods? Explain.

4.The prospective purchaser of several new shipments of waterproof gloves hopes they are as good as the old shipments, which had a 10% rate of defective pairs. But he fears that they may be worse. So for each shipment, he takes a random sample of 100 pairs and counts the proportion P of defective pairs so that he can run a classical test. The level of this test was determined by such relevant factors as the cost of a bad shipment, the cost of an alternative supplier, and the new shipper's reputation. When all these factors were taken into account, suppose the appropriate level of this test was aplha = 0.09.

a. State the null and alternative hypotheses, in words and symbols.

b. What is the critical value of P?

5.Supply: p=5q^2 Demand= 4800-q^2/3. Professor said this had multiple steps. I know you set Supply=Demand to get equilibrium but how do you solve for X and then after how do you find the consumers and producers surplus?

6.If total cost increases from $50 to $90 as output increases from 20 to 25 units, what is the marginal cost of the twenty fifth unit of output?

7.An electrical component manufacturer has the following:

Price () received for each component sold:5

Fixed costs ():20,000

Constant marginal cost ():2

What is the break even level of production (Quantity)?

8.Assume an economy's annual money velocity in circulation is 10. Please answer the following two questions: a. If the annual nominal GDP is $200 trillion, how much money supply are enough for money demand?

9.Mr. Hassan demand function for rice is given by x=15+m(10p)^-1

where x=amount of rice demanded, m=income of the consumer, p=price of rice. Originally the income of Mr.Hassan is 4800 per month and the price of rice is 120 per kg.If the price falls to 100 per kg. calculate the total effect, substitution effect and income effect emanating from this change in price.

10.Given the demand function of a monopolist operating two plants is equal to Q=400-4p and cost functions for plant A is equal to C=20Q and plant B is equal to C=0.5Q

Assuming the monopolist can price discriminate determine the profit maximizing output from plant A and from plant B and the price charged by the monopolist.