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I shall try to answer the economics question and / or point to other resources but please bear in mind.
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- My speciality is economics for British A Level standard. My university economics is rusty in parts, because generally I don’t use it in teaching A level economics.
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I studied PPE at Lady Margaret Hall college, Oxford University, and currently work as an Economics A Level teacher. I have also examined several different economic units for Edexcel AS and A2.
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I have a question regarding stimulation of the economy. If I am right, the point in which we start to leave a recession or depression is when firms believe that we, as an economic entity, have hit the worse we can hit, and that therefore, since it’s not going to get any worse, that it is logical to take advantage of low interest rates, and therefore barrow money, therefore start hiring, and therefore, through the firm’s very own personal interest, contribute to the recovery of an economy.
Now we know that the federal reserve tries to accomplish this by buying bonds, therefore liquidation of funds, therefore increased supply in the loanable funds market, therefore low interest rates. Therefore, that amount of money that has increased, even though there is a lot of it, it still has an interest rate for a firm wishing to barrow that money because the debtor obviously has an interest to make money.
So, basically we have the FED using it’s money to liquidate the fund’s of other people, and those other people are lending, or a portion of them are lending, the fund’s that they now have because of the FED. Wouldn’t it make more sense for the FED to, instead of purchasing bonds so that those people that held the bonds may become debtors, to rather just lend the money directly to firms at a zero percent interest rate?
Economists believe that, for the most part, free markets work in an efficient way to allocate scarce resources to their most valued uses. In the model of perfect competition, firms act in their own self‐interest by trying to maximize their own profits, but as a result, society ends up using resources efficiently. Suppose the demand for beef fell for some reason. How would firms respond to this in the short run and in the long run? Clearly explain the process of how firms end up utilizing resources as efficiently as possible. Use diagrams to supplement your answer
A firm finds the following about its costs: AVC = $10, ATC = $15, MC = $12. The firm sells its product in a competitive market for $12/unit. The owner asks you for a recommendation on whether to continue to stay in business. What is your recommendation to the owner? Be sure to give economic justifications for your recommendations.
If a firm finds that its marginal cost of production is $30 and its marginal revenue is $25, explain what would be the appropriate response if the firm’s goal is to maximize profits. Use marginal analysis in your answer
Is Surplus and Savings the same thing?