# Balanza De Pagos, Apuntes - Historia Económica De España Y Mundial, Apuntes de Historia Económica de España y Mundial. Universidad Champagnat

## Historia Económica de España y Mundial

Descripción: Apuntes del curso universitario de Historia Económica de España y Mundial sobre la Balanza de Pagos - Saldo de la Balanza de Pagos

1 Mid-Term Exam—Answer Sheet Below you will find the answers to the mid-terms as well as a listing of some common mistakes that students made in trying to answer the questions. Problem #1. True, False, Uncertain 1a) Uncertain or False The cost of the last unit produced represents the marginal cost, while economies of scale refers to falling average cost. In this question, the marginal cost of aluminum cans is rising as output expands, though economies of scale may still be present. As long as the rising marginal cost is below the average cost, average cost will fall with increased output. Common Mistakes: • Failing to recognize that the costs described are marginal costs, not average costs • Assuming that if MC is increasing, there must be EOS. To determine EOS, you must know AC. • Confusing EOS and RTS. EOS refers to costs whereas RTS refers to output. 1b) False The estimated demand curve shows that the own-price elasticity of demand is -0.40. Meanwhile, the price increased from \$1.00 to \$1.50, a 50% increase. This implies that quantity demanded would drop by approximately 20% (=50%*(-.4)). This is much greater than the 1% stated in the problem. There are two other calculations that we accepted: Using \$1.50 as the base price instead of \$1.00: Change in Price: 33% (=1 – (1.00/1.50)) Decline in Quantity Demanded: -.4 * (.33) = 13% Exact Calculation: Let Q0=quantity demanded before the fire, Q1=quantity after the fire Ù Ù lnQ1 – lnQ0 = -0.4 ln (1.5) + 0.4 ln (1.0) ln (Q1/Q0) = -0.4 ln (1.5) + 0 Q1/Q0 = 1.5(-0.4) = 0.85 Ù Quantity demanded fell by 15%. Common Mistakes: • Not realizing that .4 was the elasticity of demand • Unsure of application of elasticity despite correctly identifying .4 as elasticity of demand • Not calculating price change correctly (ie not 50% or 33%) docsity.com 2 Problem #2. For the passengers market, the marginal revenue is MRp = 8 - 0.01Qp Since MC=0, at the optimum 8 = 0.01Qp or Qp = 800. From the demand curv

e it then follows that Pp = 8-0.005(800) = 4. So the optimal price for passenger service is Pp = \$4 Total revenue from passenger service is \$3,200. For the freight market, the marginal revenue is MRf = 10 - 0.002Qf Since MC=0, at the optimum 10 = 0.002Qf or Qf = 5000. From the demand curve it then follows that Pf = 10 - 0.001(5000) = 5. So the optimal price of freight service is Pf = 5. Total revenue from freight service is \$25,000. Total profits for the firm are 28,200 - 19,000 = \$9,200. Since total profits are positive, the firm should not shut down. The argument of the accountants does not make any sense since fixed costs should not be considered in the choice of the optimal price or quantity (assuming the firm does not shut down). Fixed costs do play a role in the decision to shut down or not. If the joint fixed costs are \$30,000, then the daily profit is 28,200 - 30,000 = -\$1,800, i.e. the firm makes a loss. The firm should therefore shut down. Common Mistakes: • Failing to recognize that this is a monopoly in two markets. As a result, the MC of freight should be set equal to the MR of freight and the MC of passengers should be set equal to the MR of passengers. Two separate prices are then obtained. (People and freight are like apples and oranges: you can’t add them.) • Not explicitly evaluating the accountants’ arguments. Simply noting that “the accounts were wrong because prices should actually drop” is not an evaluation of their arguments. • Not noting that fixed costs were irrelevant for calculating prices. • Not stating that when fixed costs rise to \$30,000 the business no longer is profitable and, all else equal, should not operate. docsity.com Problem #3. The demand can be at most 400. Afterwards, demand is perfectly inelastic (e.g. if you lower the price, the same amount will be demanded: 400). Re-arranging the supply and demand functions: P = 5000 – 4 Qd; P = 3000 + Qs, The market can be graphed as: P 5000 Scanner Ma

rket Supply 3000 Demand Q 400 3a) Equilibrium Price and Quantity are determined by setting Qea tal que el tipo de cambio tenga un valor comprendido entre emáx y e inf, el Sector Público no intervendrá y estaremos en un sistema similar al de Tipos de Cambio Flexibles. Ahora bien, si suponemos que la curva de Demanda de Moneda Extranjera se desplaza hacia la derecha de manera que se corte con la curva de Oferta de Moneda Extranjera a un valor superior e2 fuera de la banda de fluctuación, entonces el Sector Público intervendrá absorbiendo el Exceso de Demanda de Moneda Extranjera existente para el tipo de cambio emáx. Es decir, que el Sector Público estará dispuesto a ofrecer divisas en la cuantía necesaria con el fin de que el tipo de cambio no supere el límite superior de la banda de fluctuación. Si la demanda hubiese aumentado más, el Exceso de Demanda sería mayor y también la cantidad de divisas que hubiese tenido que ofrecer. Lo mismo ocurre con la Oferta de Moneda extranjera. Llevando al límite este argumento, nos encontraríamos con un Mercado de Divisas en el que las curvas de 2 docsity.com Oferta y Demanda de Moneda Extranjera son: La Oferta de Divisas es igual a la Demanda de Divisas porque el Sector Público ha intervenido. Esta intervención del Sector Público supone que permitimos que existan desequilibrios en la Balanza de Pagos. Reduciendo al máximo la banda de fluctuación, se llegaría a un tipo de cambio ÚNICO, para el cual el Sector Público estaría dispuesto a comprar y vender cualquier cantidad de divisas, es decir, nos encontraríamos con un mercado de divisas totalmente intervenido, o lo que es lo mismo, estaríamos ante un mercado de tipos de cambio fijos En esta situación, el Mercado de Divisas estaría SIEMPRE en equilibrio. Para que el equilibrio en el Mercado de Divisas sea estable, ha de cumplirse que la pendiente de la curva de Oferta de Divisas sea positiva. Esta condición supone que la elasticidad de las expo