a. Find the monopolist’s profit-maximizing quantity and price.
b. Find the monopolist’s profit.
A production function shows a relationship between inputs and total output. True or False.
The short-run is defined as the time period in which at least production is held fixed. True or False.
In the short-run capital and labor are variable. True or False.
If total product is increasing marginal product must also be increasing. True or False?
Grapes must be harvested by hand. This production function is characterized by fixed proportions in that each worker must have one stem clipper to produce any output. A skilled worker with clippers can harvest 50 pounds of grapes per hour.
Graph the production isoquants for Q = 500 and Q = 1,000 and indicate where on the graph firms are likely to operate.
ANS:
Suppose a vineyard owner currently had 20 clippers. If the owner wished to utilize fully these clippers, how many workers should be hired? What should grape output be?
ANS:
What factor would determine if the choices described in part b are profit maximizing?
ANS:
Consider the production function:. Under what condition would this production function exhibit constant returns to scale? Explain your answer.
ANS:
Complete the following table for Tomâs TV Inc.
# Plants
Labor
# Workers
Total
Product
of Labor
Average
Product
of Labor
Marginal
Product
of Labor
1
0
0
1
1
20
1
2
22
1
3
66
1
4
14
1
5
18
b. After which worker do diminishing returns set in?
ANS:
Total
Output
Total Product
(8) 2,000 of labor
1,000
0 100 300Units of Labor
Using the above production function, draw a graph of the marginal product as a function of output. Does this production function exhibits diminishing returns?
ANS:
(9) The marginal product of labor is known to be greater than the average product of labor at a given level of employment. Is the average product increasing or decreasing? Explain.
ANS:
The marginal product of labor in the production…
A. will decrease if the price of the firm’s output increases.
B. is the firm’s demand curve for labor.
C. will increase if the firm hires more labor (in the relevant region of its labor demand curve).
D. All of the above are correct.
A degree of competition in stock and bond markets in the economy.
B efficient use of limited productive resources to satisfy economic wants.
C issue of equality in the distribution of income and wealth among households.
D budget deficits in the d…
| Which of the following is not an example of nonprice competition? | |||||||||
|
Combination Football All other good
A &n…
Which of the following statements is false?Answer
| A higher Real GDP is associated with a lower unemployment rate, ceteris paribus. | ||
| If AD rises and SRAS is constant, the price level rises in the short run. | ||
| If both SRAS and AD decline, the unemployment rate rises in the short run. | ||
| If both SRAS and AD increase, the price level necessarily rises in the short run. | ||
| none of the above |
2 If the income elasticity of demand of Hormone-free milk estimated as +5.0, briefly briefly define what this means and what it implies about nature the of the production
1. In 2003, A was 1,507 billion dollars, B was 7.274 billion dollars, C was 2.054 billion dollars, D was 1.624 billion dollars and E was 505 000 million. Calculate: a. aggregate spending. b. aggregate income. c. Gross Domestic Product (GDP). d. the government budget deficit. e. saving families. f. government savings. g. national saving. h. indebtedness to the rest of the world.
2. Tropic Republic produces only bananas and coconuts. The base year is 2005 and the tables show the quantities produced and prices.
Amounts 2005 2006 Bananas 1000 clusters 1100 clusters Coconut 500 clusters 525 clusters Prices 2005 2006 Bananas $ 2 per cluster $ 3 per cluster Coconut $ 10 per cluster $ 8 per cluster
a. Calculate the nominal GDP in 2005 and 2006 Tropic Republic.b. Calculate the GDP in 2006 using the method of the base year prices. c. Compute the GDP deflator in 2006.
1. In 2003, A was 1,507 billion dollars, B was 7.274 billion dollars, C was 2.054 billion dollars, D was 1.624 billion dollars and E was 505 000 million. Calculate: a. aggregate spending. b. aggregate income. c. Gross Domestic Product (GDP). d. the government budget deficit. e. saving families. f. government savings. g. national saving. h. indebtedness to the rest of the world.
2. Tropic Republic produces only bananas and coconuts. The base year is 2005 and the tables show the quantities produced and prices.
Amounts 2005 2006 Bananas 1000 clusters 1100 clusters Coconut 500 clusters 525 clusters Prices 2005 2006 Bananas $ 2 per cluster $ 3 per cluster Coconut $ 10 per cluster $ 8 per cluster
a. Calculate the nominal GDP in 2005 and 2006 Tropic Republic.b. Calculate the GDP in 2006 using the method of the base year prices. c. Compute the GDP deflator in 2006.
Q1 . Adding to Table 11.1, if real GDP in 2002 were &10,048.8 billion and nominal GDP in 2002 were $10,469.6 billion, calculate the percentage change from 2011 to 2002 in nominal GDP, real GDP, and price level. What is the value of the GDP deflator in 2002?Nominal versus Real GDPVariable 20002001Nominal GDP $9,817.0 billion Percentage change 3.17Real GDP$9,817.0 billion Percentage change 0.76GDP deflator (price changes)100 Percentage change 2.4Q2. From the Bureau of Economic Analysis Web page (http://www.bea.govwww.bea.gov), construct a table showing the annual percentage in real GDP, gross private domestic investment (I), non-residential fixed investment from 2000 to 2008. Discuss how the changes in these variables show the difference between the recession of 2001 and the recession in 2007 and 2008 that is discussed in the news article that opened this chapter.Q3. Explain how the aggregate expenditure function shifts in response to changes in each of the following variables:The real interest rate increaseConsumer confidence decreaseHigher taxes are imposed on business profits.The economies of many countries in the rest of the world go into recession.Q4. What were the key provisions of the economic stimulus bill passed by the Congress in February 2008? What further changes in fiscal policy have occurred since this time?
Given the following Demand & Supply functions:
Qd = 25 – P
Qs = 10 + 2P
a – What is the equilibrium values of P and Q?
Now suppose the demand function changes to:
Qd = 10,000 – 2P
If Total Cost function is:
TC = 5000 + 50Q
b – Find the Profit – maximizing Quantity and Price.
c – Find the firm’s profit.
Show graphs
(i) What is the competitive equilibrium price?
Assume now that every unit of output creates pollution which creates a marginal damage which is increasing in output: t…
am supposed to draw a short run and long run aggregate supply curve
find attached the question for more details
an investment has the following cash flows adn a required return of 13 percent. Based on IRR, soul this project be accepted? why or why not?
Question Details
Every so often, a disgruntled college graduate sues her school on grounds that her tuition payments did not land her the good job she was expecting when she started there. Courts invariably throw out cases like hers. They are, however, willing to entertain suits against trade schools…
Please limit your response to
250 words.
1.
Assume youâre advising the newly formed Russian
government (formerly the Russian SSR) in 1991 regarding their policy toward
State and Collective Farms in agriculture, which were both very large
individually, with State Farms (Sovkhozy) being much larger, with thousands of
workers, machine-tractor stations, etc.. Both types of organizations had grown
unwieldy and inefficient and received various government subsidies. Construct a
program that you could recommend to the government for privatizing these farms,
which would immediately lower the incomes of the subsidized farmers, without
creating a political disaster. Is there a way in which a plan could provide
incentives to the Farm members that would have a good chance of raising
productivity and lead to increased agricultural output while at the same time
eliminating subsidies?
Chapter 5, complete Application Questions #3, 4,5 on page 138. “Made to Measure”, “Change in Firm’s Total Fixed Cost”, and “Short Run Production Process”.
This assignment is due Saturday at midnight, MST
my email is shohanghotra@yahoo.com
You will need this website to finish these two questions..
http://www.feasta.org/documents/feastareview/daly.htmhttp://www.feasta.org/documents/feastareview/daly.htm
In point form, list how Daly proves his quote: “That which seems to be wealth may in verity be only the gilded index of far-reaching ruin.”
To some the business cycle graph and explanation is out of date and does not reflect the idea that “the economy is a subset of nature.” Select three major ideas from the Daly lecture to support the Paul Hawken quote found on the Business Cycle Graph in Figure 6?
a. P < MC, P > ATC
b. P > MC, P
c. P = MC, P > ATC
d. P > MC, P = ATC
Question 1
An investor has utility function U = 10 + 5P – 0.02P2. What is the expected utility of the following investment option:
Probability
Payoff (P)
0.4
10
0.3
20
0.2
30
0.1
40
Select one:
A. 20
B. 100
C. 102
D. 114
E. none of the above
Question 2
Exploring a new coal mine costs $100,000 and has a 40 percent chance of finding $500,000 of coal and a 60 percent chance of finding $100,000 of coal. The expected value of perfect information is:
Select one:
A. $0
B. $100,000
C. $150,000
D. $200,000
E. $300,000
Question 3
Susan is indifferent between $500 for sure and a bet with a 60 percent chance of $400 and a 40 percent chance of $700. Susan is:
Select one:
A. risk-averse
B. risk loving
C. risk-neutral
D. a profit maximizer
E. irrational
Question 4
Expected utility is:
Select one:
A. the profit from a given decision
B. a probability weighted average of possible profits
C. an evenly weighted average of possibility profits
D. a probability weighted average of possible utility levels
E. the expected profits plus a number that depends on risk
Question 5
The principal-agent problem occurs as a result of:
Select one:
A. the absence of a contract between managers and owners
B. the separation of ownership from management
C. the difficulty of identifying the principal agent with whom to negotiate
D. competition between managers at various levels
E. none of the above
Question 6
The moral-hazard problem occurs when:
Select one:
A. a consumer of insurance changes his or her behavior in such a way as to decrease the probability of a payoff
B. a consumer of insurance changes his or her behavior in such a way as to increase the probability of a payoff
C. insurance companies change their behaviors in such a way as to increase the probabilities of a payoff
D. insurance companies change their behaviors in such a way as to decrease the probabilities of a payoff
E. none of the above
Question 7
Consider Mr. Ed, who purchases an…
ECON224-1102B-19 Macroeconomics
Assignment Name: Unit 4 Individual Project
Deliverable Length: 3–4 pages
Details: As an employee of the World Bank, you have been asked to research 1 economic concern in a South American country and write a report on your findings.
•Select a South American country to research.
•Select one of the following economic concerns to research:
?quantities of specific goods and services
?Gross Domestic Product (GDP)
?unemployment
?inflation
•Research data sets for the 1 economic concern within the South American country that you have chosen.
•In a 3–4 page report, answer the following questions:
?What are 2–3 relationships between the economic concern you selected and that specific country’s economy?
?What trends do you see in the data sets?
?Support your assertions of the trends with statistical evidence.
?Cite all of your sources correctly and include a reference list, both in APA style.
Please submit your assignment.
For assistance with your assignment, please use your text, Web resources, and all course materials
The City of Lake Orion issues licenses to 20 individuals
to fish in its two lakes.
The daily fish catch at Lakes 1 and 2 respectively are
given as follows:
Lake 1:Q1
= 16L1– 0.4L12
and Lake 2: Q2 = 10L2 – 0.1L22,
where Q is the fish catch, and L is the number of fishermen,
at a given lake.
Please answer and address all three of the following questions and statements. Your answers should be written into referenced narratives stretching three pages in length. Rely on a standard #12 font, and print on fronts of pages, with lines double-spaced. Aside from the first paragraph, please indent all subsequent paragraphs five single spaces. If you print up your answers front and back, I shall offer you either a zero for this exam, or ask you to reprint your exam on the fronts.
Please answer and address all three of the following questions and statements. Your answers should be written into referenced narratives stretching three pages in length. Rely on a standard #12 font, and print on fronts of pages, with lines double-spaced. Aside from the first paragraph, please indent all subsequent paragraphs five single spaces. If you print up your answers front and back, I shall offer you either a zero for this exam, or ask you to reprint your exam on the fronts. Your exam should include three pages for each answer, x three answers – and thus run nine pages of text. Please include a cover page that notes your name, and our EC447 or 547 course. The final page would then be page #10 and this would contain your references. Please staple the top left corner of your exam. Please do not place in plastic folders.
Question 1. If we are to understand the “Economics of Transition,” we have first to understand the “Great Experiment.” If we are to understand the “Great Experiment,” my take is that we need to consider the ideas that led to its initiation. So, let us consider what Karl Marx advances in his famous and short work, The German Ideology.
According to Marx, what problems emerge with the “Idealist” conception of history?
Marx posed as a challenge to the “Idealist” conception of history what is noted as “historical materialism,” and just as readily and correctly as “dialectical materialism.” What are the basic tenets of Marx’s historical materialism? You might consider, por exemplo, the importance of production; the relationship between a mode of production and the attendant social classes; the prospects for conflict between classes and the outcomes. As you write up your answer, you could integrate your discussion with what in class has been considered as a “stages of history” approach. Would you identify Marx as an inherently revolutionary thinker? If so, or if not, please present your…
Every day we hear and read about the economy on the radio,
on television, in the newspaper, on the Web, and in magazines. This assignment is
to evaluate what an article or news story has to do with economics. Please
present a short (1 page at least 400 words but no more than 500 words) briefing
on a selected article or topic.The
article needs to be recent–not older than 90 days.Do not use Wikipedia, About.com, or similar
sites.Please provide a brief summary of
the article. Then, tell which part of the article applies to economics and how.
QUESTION 1 (20 Marks)
Economists assume that the goal of a firm is to maximize profits. What are other goals that firms pursue?
QUESTION 2 (20 Marks)
From the Statistics Canada website (http://www. statscan.ca), find out how much profits contribute to Canadian GDP. What role do profits play in a free-market economy?
QUESTION 3 (20 Marks)
Assume that managers take two years off without pay to complete an MBA. Use the concepts of opportunity cost and net present value to answer the following:
a. How would you measure if an MBA is profitable?
b.
QUESTION 1 (20 Marks)
Economists assume that the goal of a firm is to maximize profits. What are other goals that firms pursue?
QUESTION 2 (20 Marks)
From the Statistics Canada website (http://www. statscan.ca), find out how much profits contribute to Canadian GDP. What role do profits play in a free-market economy?
QUESTION 3 (20 Marks)
Assume that managers take two years off without pay to complete an MBA. Use the concepts of opportunity cost and net present value to answer the following:
a. How would you measure if an MBA is profitable?
b. What would happen to the number of managers applying to universities to do an MBA if wages of managers without MBAs increase 10 percent but wages of managers with MBAs do not change? Explain.
QUESTION 4 (20 Marks)
Given that the total cost function is:
TC = 100Q – Q2 + 1/3 Q3
where Q = rate of output and TC = total cost
a. Determine the marginal and average cost functions. (4 marks)
b. Calculate the output level that minimizes average cost. (8 marks)
c. Calculate the output level that minimizes marginal cost. (8 marks)
QUESTION 5 (20 Marks)
The demand for widgets (X) is given by:
Px = 160 – 4x
The production of widgets has the following average variable costs:
AVC = 2x – 20
Fixed costs are 162.
Calculate the output level of widgets that:
a. Maximizes total revenue.
b. Minimizes the average total cost (ATC) of widgets.
c. Minimizes the total cost (TC) of widgets.
d. Maximizes profits.
QUESTION 6 (20 Marks)
How does an increase in the price of widgets affect the:
a. Demand for widgets
b. Supply of widgets
c. Demand for woozles if widgets and woozles are substitutes
d. Demand for gadgets if widgets and gadgets are complements
QUESTION 7 (20 Marks)
Use the following supply and demand functions to answer the questions below:
Qd = 20-2P, Qs = 5+3P
a. Determine the equilibrium price and quantity and illustrate with a graph.
b. The government imposes a tax of $5.00. …
b. An increase in the dollar interest rate.
c. An increase in output in the US
2. a) Suppose Russia’s inflation rate is 200% over one year but the inflation rate in the US is only 2%. According to Relative PPP, what should happen over the year to the Swiss franc’s exchange rate against the Russian ruble? ( ie how much would it appreciate or depreciate) (3 pts)
b) The price of a Big Mac in Russia is 82.50 roubles while that in the US is $3.00 Using the Big Mac prices as a proxy for price level in the two countries calculate the âbig Mac PPP exchange rate. (3 pts)
c) The current spot rate is observed to be 27.50 roubles per dollar. On the basis of comparing the Big Mac PPP a exchange rate and the actual current spot rate would you expect a long run appreciation or depreciation of the rouble. Explain your answer. (3 pts)
d) Find the real exchange rate for the following case: Assume that the representative basket of Russian goods costs 100 roubles and the representative U.S. basket costs $125, and the dollar/euro exchange rate is $0.75 per euro ( 3 pts)
3. a) In the long run under the monetary approach to exchange rate (with the assumption that PPP holds) what would be the impact of an increase in money supply in the US on the following on : (6 pts)
i) US price level
ii) dollar interest rate
iii) dollar-euro exchange rate.
3. b) What would be the impact of a increase in the rate of growth of money supply on:
(4 pts)
i) dollar euro exchange rate (be precise in your answer)
ii) dollar interest rate
4. Use the AA âDD framework to answer the following questions (with figures) Assume you are starting from a full employment equilibrium. ( 16 pts)
a) There is a an outbreak of war in the main trading partner of the country ( ie the leading export destination of the countries products). This results in a temporary disruption of trade between the two countries. ( assume other countries are insignificant) What is the impact on the DD and AA curves.
b) Why is the outcome in a) not desirable? Which policy (monetary or fiscal) would be more appropriate to improve the situation. Explain your choice clearly using figures).
c) Now suppose that instead of a war, there is a financial crisis in the foreign country which leads investors to revise their expectations of the future exchange downwards (Ee falls). What is the impact on the AA and DD curves.
d) Why is the outcome in b) not desirable? Which policy (monetary or fiscal) would be more appropriate to improve this situation. Explain your choice clearly using figures.
ECS1240 Coursework 3 â Market Structures and Introduction to Macroeconomics
This is the third coursework assignment and the deadline for submission is 4 pm on Monday March 7th. All assignments need to be submitted to the student office and you need to retain your receipt. There are 2 questions for this particular assignment and you need to answer both of them. The bold numbers in brackets indicate the maximum marks to be awarded for that part of the question.
All of the questions should be answered on these sheets so there is no need to hand in anything other than these. Just record your name and student number below.
Student Name _______________________________________________________________
Student Number_________________________________________
Question 1
The diagrams above depict a short run equilibrium position for a perfectly competitive firm and industry.
Questions
What type of profit is the firm currently making? Explain your reasoning.
__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(2 marks)
Explain the likely process that will lead the firm and industry towards the long run equlibrium position.
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(2 marks)
The diagram above depicts the long run equilibrium for a perfectly competitive industry. Show on the diagram, as well as explaining, how the industry would adjust…
1-Provide a well-explained definition of Industrial (Economic) Regulation.
2-Provide
a well-supported explanation of how industrial regulation affects the market.
Identify and explain the tools used and actions taken by government to impact
the market and the impact those actions have on the marketplace.
3-Which are the entities Affected by Industrial Regulation? Provide a credible and
well-supported explanation of the entities affected by industrial regulation in
terms of market structure.
4-Provide
a very well-supported explanation of why industrial regulation affects those
entities identified in #3. Detail the answer.
5-Provide
a detailed and well-supported explanation of the entities affected by social
regulation. Provide also a precise comparative with Industrial Regulation.
6- Provide
a well-supported explanation of how social regulation affects those entities
identified in #5. Describe the positive and negative impacts social regulation
may have on the business entities identified in #5.
7-Provides
a detailed and well-supported explanation of the justification for natural
monopolies according to economic theory.
8-Provide a credible and
well-supported explanation of how the following regulatory commissions
(three main regulatory commissions of industrial regulation) govern industrial
regulation:
1. Federal Energy
Regulatory Commission.
2. Federal
Communications Commission.
3. State Public Utility
Commissions.
Fully
Identify what they govern,the tools the
commissions use (how they govern). Fully explain the answer.
Q1. The following matrix shows strategies and playoffs for two firms that must decide how to price. Firm 2 Price HighPrice LowFirm 1Price High400, 400-50,700 Price Low700, -50100, 100 Does either firm have a dominant strategy, and if so, what is it?What is the Nash equilibrium of this game?Why would this be called a prisoner’s dilemma game?Q2. The following describes the ice cream industry in summer 2003:Given the Federal Trade Commission’s approval of Nestle’s acquisition of Dreyer’s Grand Ice Cream Inc., two multinationals, Nestle SA and Unilever, are preparing to engage in ice cream wars. Unilever, which controls the Good Humor, Ben & Jerry’s, and Breyer’s brands, holds 17 percent of the US market, while Nestle, owner of Haagen – Dazs and Drumstick brands will control a similar share after buying Dreyer’s.Ice cream has long been produced by small local dairies, given the problems with distribution. Most Americans eat ice cream in restaurants and stores, although 80% of the consumption of the big national brands happens at home. Both Unilever and Nestle want to move into the away – from – home market by focusing on convenience stores, gas stations, video shops, and vending machines, a strategy the rivals have already undertaken in Europe.Five national brands – Haagen-Dazs, Nestle, Ben & Jerry’s, Breyer’s, and Dreyer’s – are developing new products and flavors, focusing on single-serving products that carry profit margins 15 to 25 percent higher than the tubes of ice cream in the super markets. The higher profit margin can open new distribution outlets. Although traditional freezer space is very costly, Unilever, Nestle and Dreyer’s have been pushing for logo – covered freezer cabinets in store, given the higher profit margins.Under the FTC settlement, Nestle will be allowed to keep Dreyer’s distribution network, which delivers ice cream directly to more than85 percent of US grocers. Unilever must use middleman to deliver most of its Good Humor and Breyer’s…
Q1. The following graph shows the cost curves for a perfectly competitive firm. Identify the shutdown point, the breakeven point, and the firm’s short-run supply curve.$MC ATCAVC QQ2. The following facts characterize the furniture industry in the United States.The industry has been very fragmented so that few companies have the financial backing to make heavy investments in new technology and equipment.In 1998, only three U.S. furniture manufacturers had annual sales exceeding $1 billion. These firms accounted for only 20% of the market share, with the remainder split among 1000 other manufacturers.Capital spending at one manufacturer, Furniture Brands, was only 2.2% of sales compared with 6.6% at Ford Motor company. Outdated, labor incentive production techniques are still being used by many firms.Furniture manufacturing involves a huge number of options to satisfy consumer preferences, but this extensive set of choices slows production and raises costs.Small competitors can enter the industry because large manufacturers have not built up any overwhelming advantage in efficiency.The American Furniture Manufacturers Association has prepared public relations campaign to “encourage consumers to part with more of their disposable income on furniture.”In the fall of 2003, a group of 28 U.S furniture manufacturers as the U.S government to impose antidumping trade duties on Chinese-made bed room furniture, alleging unfair pricing.The globalization of the furniture industry since the 1980s has resulted from technological innovations, governmental implementation of economic development strategies and regulatory regimes that favor global investment and trade, and the emergence of furniture manufacturers and retailers with a capacity to develop global production and distribution networks using Chinese subcontractors has accelerated globalizing in recent years.Discuss how these facts are consistent with the model of perfect competition.Q3. Given the demand curve in the…
3. Gobi Inc. has sales of $40,000,000. The contribution margin is 40% and the fixed costs are $3,000,000. The variable cost per unit is $12. The company is considering two different strategies for increasing their profits:
Spend $2,000,000 in advertising; the results is expected to increase the companyâs sales by 25% Reduce the price by 20%; the price-demand elasticity is -3.0 Which of the two strategies will generate the highest overall profits?
Extend the analysis of an OLG model (with no natural resource, just a capital labor production function) to the case of a general utility function with a constant elasticity of marginal utility:
u'(c) = c1-?
Assume population grows at a rate 1+n and capital depreciates at the rate d.
Begin by finding the savings of each young generation (t) given the wage wt and the interest rate rt+1. What is the saving rate at time t as a function of these and the preferences (discount rate and elasticity of marginal utility).
Extend the analysis of an OLG model (with no natural resource, just a capital labor production function) to the case of a general utility function with a constant elasticity of marginal utility:
u'(c) = c1-?
Assume population grows at a rate 1+n and capital depreciates at the rate d.
Begin by finding the savings of each young generation (t) given the wage wt and the interest rate rt+1. What is the saving rate at time t as a function of these and the preferences (discount rate and elasticity of marginal utility).
How does the savings rate depend on the interest rate? Does your answer depend on the value of the elasticity of marginal utility? Can you think of an explanation?
Assume a Coub-Douglass production function and deduce the dynamics of the capital stock in the economy by relating the wage and interest rate to the partial derivatives of the production function.
Now assume that technology grows at an exogenous rate 1+g. Repeat the analysis by using the same trick used to solve the Solow and Ramsey models with exogenous technological progress.
HACE 8150 Homework 1 Name:__________________________________ Problem 1: Consider the following function: y = f (x; a) = a2 + x -ax2 where a > 0 is a parameter. 1. Find the first order condition for a critical point of this function. 2. Is this a maximum or a minimum or an inflection point? 3. Solve for x* (a), the maximizer of the function f (x; a). Also find y* (a), the maximized value of y as a function of a 4. Find dx*/da and dy*/da 5. Now use the FOC from 1 and the implicit function theorem to find dx*/da 6. Use the envelope theorem to find dy*/da . Why does this theorem allow you to simplify your calculations with respect to point 4? Problem 2: Drawing indifference curves There are two goods in the world: cigars (C) and whisky (W). Draw a few indifference curves to represent the following preferences for the two goods and write a sentence or two to explain your drawing. 1) I like cigars, but I hate whisky. 2) I am always willing to give up one cigar to get one glass of whisky. 3) I only like to have a cigar with a glass of whisky. I never like them apart. 4) I like whisky, but I donât care about cigars at all. 5) What might a consumerâs indifference curves look like if he was addicted to x1 and x2 was a regular good?
Problem 3: Consider the problem Max 242s:t: x + y = 400 1. Set up the Lagrangian and find the first order conditions 2. Solve explicitly for x, y, z and ? the Lagrange multiplier. 3. Set up the dual problem of 1: i.e., minimize the constraint function subject to the objective function being equal to the value of z*obtained in 2. 4. Solve explicitly for x, y, and ?D, the Lagrange multiplier in the dual problem. 5. What is the relationship between ? and ?D, and can you provide an economic explanation for this?
Practice Homework 31. Monopoly Suppose that the (inverse) market demand curve for a new drug, Adipose-Off, designed to painlessly reduce body fat, is represented by the equation P=100-2Q, where P is the price in dollars per dose and Q is the annual output. (The marginal revenue curve is thus given by the equation MR=100-4Q.) Suppose also that there is a single supplier of the drug who faces a marginal cost, as well as average cost, of producing the drug, equal to a constant $20 per dose.(1) What are the monopolist’s profit-maximizing output and price?(2) What is the resulting deadweight loss relative to the competitive outcome? Give quantitative answers, please.(3) Suppose that the government levies an excise tax of $5 per dose on the monopolist. (a) What would happen to the monopolist’s profit-maximizing output and price? Calculate the new output and price, please.(b) What would happen to consumer and producer surplus? Calculate the changes, please.(c) How much money would the government collect due to the tax (that is tax revenue)? (4) Calculate the Lerner Index for the monopoly described in question (1) above (before tax).2. Make profit or not?The City of Berkeley is currently considering alternative ways of providing cable service to its citizens. Based on an econometric analysis of several recently awarded cable franchises in other cities, economists have determined that the total cost, TC, and inverse demand curves for a cable company in Berkeley would be:TC = 2Q – 0.1Q2 + 0.005Q3 and P = 20 – 0.5Q, Where output Q is measured in thousands and P is the monthly basic tier price. (You can directly use MC = 2- 0.2Q + 0.015Q2)(a) Given this information, what are the equations for the total and marginal revenue curves?(b) City Councilor A believes the city should own and operate a cable system for the purpose of making as much profit as possible. The profit would be used to lower the city government’s deficit. If Councilor A gets her way, what will be the price and…
Thanks
EC320 Assignment 3 covering Chapter 6 1. There are 5 people who rank 4 projects. The rankings are as follows (first to last): Person 1: ADCB Person 2: ACBD Person 3: DBCA Person 4: CBDA Person 5: BCDA Now, following from the diagram in the text, sketch these preferences as in figure 6.2. Don’t send me the sketch, but tell me what you see going on. Then, decide if any of the 4 projects will be chosen by a majority vote rule. Which ones, if any? If none, why not? 2. In 1998, Puerto Rico voted in a referendum regarding the territory’s status. There were 5 choices: Retain Commonwealth status; become a state; become independent; be “freely associated” (a kind of independence but giving the US certain powers), and none of the above. How would you set this election up so that the “will of the people” came through loud and clear? Do the number of options matter? Look up on the Internet what the decision was. What other problems arise when people vote on so many options? 3. Go to “InstantRunoff.com” on the internet. What is an instant run off system? How does it compare to first or second round voting systems? What advantages do you see here? What disadvantages? Do some quick research on instant run off. You will find that several cities have dropped it. What happened? This issue was on the ballot in Fort Collins this April. You can research it using Google. What was the result? Were any candidates elected without a majority? 4. American voters have, at the national level, elected the Democrats and their “change” agenda in 2008 and then in 2010 did an about face. Polls are suggesting they may be doing another about face. What does the median voter theorem say and how can we use it to explain these conflicting election results? How would it apply to the rise of the Tea Party? 5. What is rent seeking? Find two examples outside of those in the text. In your examples, is the “rent” substantial? What would make it go away?
In 2006, Willem de Kooning’s abstract painting Woman III sold for $137.5 million. Portray this sale in a demand and supply diagram and comment on the elasticity of supply. Comedian George Carlin once mused, “If a painting can be forged well enough to fool some experts, why is the original so valuable?” Provide an answer.
Essay Questions: Please answer all of the essay question using a Word doc. format. Number each in order (no skipping around). Save the file using the words “final_essay_your last name.” Keep your answers to short paragraphs where possible. Please, no essays.
Total points = 70
1. You are given the following information.
Exports X = 1,300
Imports M = 2,000
Capital inflows ki = 800
Capital outflows ko = 300
Compute net exports, net capital flows, and the balance of payments. (7 pts.)
2. The U.S.
Essay Questions: Please answer all of the essay question using a Word doc. format. Number each in order (no skipping around). Save the file using the words “final_essay_your last name.” Keep your answers to short paragraphs where possible. Please, no essays.
Total points = 70
1. You are given the following information.
Exports X = 1,300
Imports M = 2,000
Capital inflows ki = 800
Capital outflows ko = 300
Compute net exports, net capital flows, and the balance of payments. (7 pts.)
2. The U.S. imports Japanese cars with a domestic price of 5,000,000 yen and the yen/dollar exchange rate is 120 on January 1, 2003. On January 1, 2004 the yen/dollar exchange rate is 125. What is the dollar price of the cars on January 1, 2003? What is the dollar price of the cars on January 1, 2004? (5 pts.)
3. Describe the basic characteristics of the monopoly model and explain how these characteristics affect the ability of a monopolist to earn pure economic profit in both the short run and long run. (7 pts.)
4. The U.S. economy is experiencing a decrease in home prices and consumer wealth, a credit crisis in the financial markets, and declining consumer and business confidence. What components of aggregate demand are affected and what is the impact on real output? What are the fiscal and monetary options? (10 pts.)
5. Many restaurants offer “early-bird specials ” to dinner customers. These specials consist of a significant price reduction on selected menu items purchased before some pre-determined time, e.g., 6 p.m. Is such a practice a form of price discrimination? If so, what type? (5 pts.)
6. Are the following outputs considered an intermediate good, a final good, or neither for purposes of calculating GDP in the current year? For each answer, just say intermediate good, final good, or neither.
a. New tires put on a new Corvette at Big O Tire store
b. The net sales price of a home built in 1990 when it is resold in 1997
c….
MOVING AVERAGE
As a tool of forecasting, the method of moving averages
attempts to forecast values on the basis of the average of the values of past few periods.Successive values are calculated by considering the new value and dropping the old one.
Example-The demand for an item is observed for 15 months and recorded below
MONTH DEMAND 1 280 2 288 3 266 4 295 5 302 6 310 7 303 8 328 9 309 10 315 11 320 12 332 13 310 14 308 15 320
Calculate (i) 3 monthly (ii) 4 monthly moving averages?
Solution-
Month Demand 3- Monthly moving average 4- Monthly moving average 1 280 2 288 3 266 4 295 278 5 302 283 282.3 6 310 287.7 287.8 7 303 302.3 293.3 8 328 305 302.5 9 309 313.7 310.8 10 315 313.3 312.5 11 320 317.3 313.8 12 332 314.7 318 13 310 322.3 319 14 308 320.7 319.3 15 320 316.7 317.5 16 312.7 317.5
EXPONENTIAL SMOOTHING
This is another time series forecasting technique where the forecast for the next period is calculated as weighted average of all previous values. It is based on the premise that the most recent value is the most important for predicting the future value. Also it presumes that values prior to the current value are also relevant but in declining importance as we go back in time. The weights decline exponentially as we consider the older values.
The choice of smoothing constant,a-
Choosing an appropriate value of the smoothing constant a is an important matter. This is because the choice of this value can make the difference between an accurate and an inaccurate forecast.The difference between an actual value and a forecasted value is called a forecast error.
A measure of overall error of the forecasts made is the Mean Absolute Deviation,MAD.
MAD= ?ÂŚyt-FtÂŚ
n
Example- The demand for a particular item during the…
3. Why does a market based economic system need to be monitored or is, in fact, a market system basically self-stabilising? (1 Mark)
4. Currently Australian consumers are paying off their debts and not spending. Using the simple Keynesian model to assess the implications for equilibrium GDP and the level of savings of an increase in the savings function. Conversely what would happen to
equilibrium income if there is a sustained rise in private investment spending?
5. State the difference between:
-uncertainty and risk.
-between the interest rate and the exchange rate
– between the supply side shocks and demand side shocks
-between a trade deficit and net foreign debt
6. Assuming that the money market is initially in equilibrium, trace through the effects of a rise in the money supply on the money market on the interest rate and also on output, employment and the price level.
7. Why do professional and market economists monitor a whole number of economic and business indicators? What are they trying to achieve in doing this?
8. Why is a depreciation of a country currency not necessarily a bad thing?. Why is a country’s appreciation of its currency on the foreign exchange market not necessarily a good thing? (2 marks)
9. The central bank decided to implement an expansionary policy action. What would you expect to happen to the nominal interest rate, the real interest rate and the money supply? Under what economic circumstances would this type of policy action be appropriate ?
10. Why under flexible exchange rates does a nation not have too worry too much about a balance of payments deficit? What other specific advantages do flexible exchange rates give to the operation of economic policy with specific regard to the effectiveness of fiscal
policy and monetary policy?
Singapore Airlines (SIA) is one of the clients whose plans have been disrupted by the delays. When asked, in October 2006, how SIA would be affected by the A380’s problems, a spokesman replied, “The consequence of the A380 delay is the inability to grow capacity on the flights where we would like to replace 747-400s with the larger A380s, … It would mean a delay in capacity increase, rather than a decrease in the number of flights we already have.” (Sreenivasan, Ven. “Opportunity cost adding up for SIA with A380 delay”. The Business Times Singapore, October 3, 2006.) SIA was not going to spend any more money to acquire its airlines, so what kind of cost was the spokesperson describing? How does this cost affect SIA?
Berkley Gold and Tennis Club offers golf and tennis memberships. Marketing analysis of the local neighborhood served by Berkley Golf $ Tennis
Club shows that there are two types of families that might join the club: gold-oriented families, which are primarily interested in gold but enjoy playing some
tennis, and tennis-oriented families, which are primarily interested in tennis but enjoy playing some golf. The study further estimated that there 400
golf-oriented families and 300 tennis-oriented families in the neighborhood, and the estimated demand priced for golf and tennis memberships by family are
given below. There is no way to identify family types for pricing purposes and all costs are fixed so that maximizing total revenue is equivalent to maximizing
profit.
Demand Prices for Gold and Tennis Memberships
Type of family Golf membership only Tennis membership only
Golf-oriented $250 $100
Tennis-oriented $50 $200
a. If Berkley Gold & Tennis Club plans to offer golf and tennis memberships separately, what prices should be
charged for each kind of membership if Berkeley wishes to maximize profit? How much total revenue can be generated each month under this pricing plan?
b. The manager of Berkley Gold & Tennis Club has just finished her MBA degree and has an idea that bundling golf
and tennis markets memberships might increase profit for the club. Are the conditions right for bundle pricing to increase profit at Berkeley Golf & and
Tennis?
c. What is the optimal price to charge for golf and tennis (bundled) membership? How much revenue will this produce
for Berkley Gold a& Tennis? Is bundling a profitable pricing tactic for the club?
Jordan graduated from law school and is interviewing with various law firms.
Thomas’s job as a landscaper is on hold until the spring.
Sonya dropped out of school and now fails to meet the minimum requirements for his job.
Eva lost her job at a major interior design firm during the recession in the 1980s.
(1 point)
Jordan
Thomas
Sonya
Eva
6. According to the principle of cyclical unemployment, what will occur when the demand for goods and services drops during a recession? (1 point)
The business cycle resumes an upward trend.
The demand for labor drops.
The demand for labor rises.
No frictional unemployment exists.
7. Ten years ago, a house sold for $54,000. Today the same house is valued at $108,000. What has inflation done to consumers’ purchasing power? (1 point)
reduced it
increased it
doubled it
stopped it
8. If you lived on a fixed income, how would you be affected by inflation? (1 point)
You would be financially stressed because your income does not increase when prices go up.
You would be hit hard because rising inflation would lower your rate of pay.
You would benefit because you would have more purchasing power.
There would be little effect because income is not tied to infaltion.
9. During the 1990’s, the inflation and unemployment trends in the United States changed. What was unusual in the 1990s? (1 point)
Unemployment reached high levels, but inflation fell to less than five percent.
Although inflation remained at less than three percent, unemployment fell to very low levels.
Unemployment and inflation maintained to the same ratio during the 1990s.
Both unemployment and inflation rose to high levels.
10. What is the Consumer Price Index? (1 point)
a measure of prices of housing and rental costs all over the country
an index of prices of items used by manufacturers and retailers
an index determined by measuring the price of standard goods brought by urban consumers
an index of the cost of the living for all U.S. consumers
11. An example of a durable good would be (1 point)
a used car.
a paperback book.
a box of cereal.
a pack of baseball cards.
12. The main economic variables that affect business cycles include all the following EXCEPT (1 point)
interest rates.
external events.
personal savings levels.
business investment levels.
13. An accurate statement about the Great Depression would be that (1 point)
it was a recession that became a depression because of World War II.
it was set off because of a sharp and unexpected rise in interest rates.
it was the most severe economic downturn in the history of industrial capitalism.
its effects and duration would have been even worse if it weren’t for a strong economy in Japan and Europe at the time.
14. The agency that maintains the National Income and Product Accounts (NIPA) is (1 point)
the U.S. Department of the Treasury.
the U.S. Department of the Interior.
the U.S. Department of Defense.
the U.S. Department of Commerce.
15. An example of capital deepening would be (1 point)
permitting two workers to share one job.
paying for an employee to take college courses.
laying off employees when a factory is modernized.
moving a manufacturing plant overseas where labor costs lower.
16. An example of a nondurable good is (1 point)
a new car.
a used car.
a paperback book.
a washing machine.
17. GDP expressed in constant, or unchanging, prices is called
(1 point)
real GDP.
price level.
nominal GDP.
net national product.
18. Which of the following would be counted in this year’s GDP? (1 point)
the value of a loan taken out this year
The value of a television produced last year but sold this year
The bonus check a worker receives this year
The value of a savings bond sold by the federal government to invesetors this year
Note: This question was entered in error. Please select any answer choice to receive 1 point for this question. It will be removed for the ’10-11 school year.
19. Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply? (1 point)
no change
aggregate supply will decrease, raising the price level and lowering real GDP
aggregate demand will decrease, lowering both real GDP and the price level
both aggregate demand and aggregate supply will decrease, leading to lower real GDP
20. In a typical business cycle, what stage immediately follows a peak? (1 point)
contraction
expansion
trough
growth
21. How do fears of future economic problems affect GDP? (1 point)
businesses will invest more money in the short term to ensure higher profits in the future; GDP will be pushed up
consumers will spend more money in the short term to prevent future economic problems; GDP will be pushed up
government will spend less and save money for a future economic contraction; GDP will be reduced
consumers will spend less and save money in case future economic problems affect them; GDP will be reduced
22. What is the difference between a recession and a depression? (1 point)
A recession is a period of economic growth while a depression is a period of economic contraction.
A recession is more severe than a depression and lasts longer.
A depression is a particularly deep recession with high levels of unemployment.
Unlike a recession, a depression includes high levels of inflation.
23. An economy that experiences decreasing real GDP and increasing prices is said to suffer from (1 point)
a recession.
a depression.
a business cycle.
stagflation.
24. When Alison, a college math professor, leaves her job at a small rural college and starts looking for a job at a large urban university, she is (1 point)
frictionally unemployed.
structurally unemployed.
cyclically unemployed.
a discouraged worker.
25. A knitting factory worker who loses her job because the company has relocated the plant to another country is an example of (1 point)
frictional unemployment.
structural unemployment
cyclical unemployment.
seasonal unemployment.
26. Economists look to which of the following explanations for inflation? (1 point)
too much money in the economy
demand for goods exceeds supply, as in wartime
producers raise prices in order to meet increased costs
all of the above
ECOM4000 Economics Trimester 1, 2014 Individual Assignment
ECOM4000 Individual Assignment ECOM4000 Economics, Individual Assignment, T1 2014 2 Individual Assignment Short Answer Questions– based on Economic Theory This assignment counts for 20% of your total marks Due Friday 6th June, Week 11 by 5pm (AEST Australian eastern standard time) on the portal under “Assessments and Revisions” Instructions • Do this assignment individually. • You may need to do research of your own as well as reading the articles provided. Marks are awarded for this. • Address each question directly. You do not need to present answers in essay or report form. • Make sure you explain your diagrams and answer all parts of each question. You don’t need to write a lot to answer each question. The word limit is around 800-1500 words. • Reference your answers if you are using information from another source using in-text referencing and include a reference list at the end of the assignment. You do not need to reference lectures and tutorials. • 5 marks are awarded for correct use of in text referencing and a reference list at the end of the assignment. • Please consult “Student Learning Resources” uploaded on Moodle with the assignment for assistance with referencing, plagiarism and note taking. The assignment will go through Turnitin and any plagiarism can be traced. As a result you can get 0 for your assignment. • Do not plagiarise your answers-please see p.4 of Student Misconduct Policy for a definition of plagiarism and the consequences: http://kbs.edu.au/CurrentStudents/SchoolPolicies/InformationforallStudents/St udentMisconductPolicy/tabid/445/Default.aspx • Doing this assignment will be good preparation for the exam.\ • Please submit your assignment on the portal as a word document and insert any pictures/diagrams that you draw as pictures into the word document.
ECOM4000 Individual Assignment ECOM4000 Economics, Individual Assignment, T1 2014 3 Part 1: Firm Perspective [25 marks] Use…
A Federal Reserve official notes: “A restrictive monetary policy can force a contraction of the money supply, but an expansionary monetary policy may not achieve an expansion of the economy.” The official has described the problem of the:
Answer
a. Inflexibility of monetary policy tools
b. Change in taxes on monetary policy
c. Cyclical asymmetry of monetary policy
d. Political acceptability of monetary policy
Question 2
A Federal budget deficit exists when:
Answer
a.
Question 1
A Federal Reserve official notes: “A restrictive monetary policy can force a contraction of the money supply, but an expansionary monetary policy may not achieve an expansion of the economy.” The official has described the problem of the:
Answer
a. Inflexibility of monetary policy tools
b. Change in taxes on monetary policy
c. Cyclical asymmetry of monetary policy
d. Political acceptability of monetary policy
Question 2
A Federal budget deficit exists when:
Answer
a. Federal government assets are less than liabilities
b. Federal government spending exceeds tax revenues
c. Federal government spending is increasing
d. Federal government taxation is decreasing
1 points
Question 3
A budget surplus means that:
Answer
Government expenditures are greater than revenues in a given year
Government revenues are greater than expenditures in a given year
Government revenues are greater than expenditures throughout time
Government expenditures are falling and government revenues are rising
1 points
Question 4
A checkable deposit at a commercial bank is a(n):
Answer
Asset to the bank
Liability to the bank
Liability to the depositor
Asset to the Federal Reserve
1 points
Question 5
A commercial bank has actual reserves of $1 million and checkable-deposit liabilities of $9 million, while the required reserve ratio is 10 percent. The excess reserves of the bank are:
Answer
$50,000
$100,000
$900,000
$1 million
1 points
Question 6
A decrease in the interest rate will cause a(n):
Answer
Increase in the transactions demand for money
Decrease in the transactions…
PROBLEM SET # 1 (Econ, 161C) Due 04/12/11 1. Briefly comment on the following statements a) “Korean workers earn only $2.50/hour; if we allow Korea to export as much as it likes to the U.S., our workers will be forced down to the same level. You can’t import a $5 shirt without importing the $2.50 wage that goes with it.” b) “A country can’t have a comparative advantage in a good without having an absolute advantage”. c) “In a two good world a country can have an absolute advantage in both goods but comparative advantage in none” 2.
PROBLEM SET # 1 (Econ, 161C) Due 04/12/11 1. Briefly comment on the following statements a) “Korean workers earn only $2.50/hour; if we allow Korea to export as much as it likes to the U.S., our workers will be forced down to the same level. You can’t import a $5 shirt without importing the $2.50 wage that goes with it.” b) “A country can’t have a comparative advantage in a good without having an absolute advantage”. c) “In a two good world a country can have an absolute advantage in both goods but comparative advantage in none” 2. Below are five examples of unit labor requirements for a foreign country (denoted with an asterisk) and a home country. There are two goods: good1 and good2. For each example, show which country has the comparative advantage in which good, and which country has the absolute advantage. (Hint: use the unit labor requirements to calculate the relative pre-trade or autarky prices. The country with the relatively lower price has the comparative advantage in that good.) (a) aL1 = 0.5 aL2 = 0.2 aL1* = 0.2 aL2* = 0.5 (b) aL1 = 0.5 aL2 = 0.2 aL1* = 0.25 aL2* = 0.1 (c) aL1 = 0.6 aL2 = 0.3 aL1* = 0.1 aL2* = 0.3 (d) aL1 = 0.7 aL2 = 0.1 aL1* = 0.7 aL2* = 0.07 (e) aL1 = 0.4 aL2 = 0.1 aL1* = 0.004 aL2* = 0.002 3. Assume that there are two countries, Indonesia (foreign) and the Philippines (home), and two goods, rice and scooters. Unit labor requirements and the labor force in each country are given below: aLS = 1.00 aLS * = 0.50 aLR = 0.20 aLR* = 0.05 L = 200 L* = 100
(a) Draw the production possibility frontiers (PPFs) for Indonesia and the Philippines, with scooters on the horizontal axis. Label your graphs carefully. (b) Assume that the post-trade relative price of scooters in terms of rice, PSW/PRW, equals 7.5. Set the price of rice equal to one (i.e., choose rice as the numeraire good). Furthermore, assume that each country wishes to consume 100 scooters. Indicate the amounts produced, consumed, exported, imported, and the value of exports and…
1. What is the difference between scarcity and rarity?
2. Do Bill Gates and Donald Trump face scarcity and if yes, how so?
3. Specifically, what are your opportunity costs of going to college?
4. If all the unemployment in the economy were eliminated, how would this be shown on a production possibilities curve diagram?
5. What would cause the nation’s production possibilities curve to shift inward and outward–be sure to give examples.
1. What are a couple of examples from your own life where you experienced a change or shift demand and what caused these two changes?
2. Specifically, what factors can decrease or shift demand to the left?
3. Specifically, what factors can increase or shift supply to the right?
4. How are the factors that change supply related to a producer’s profits
5. How is an abundance of something related to scarcity?
1. What are transaction costs and give an example of such a cost?
2. How do price ceilings affect the allocation of productive resources?
3. Legislative bodies impose price controls to help a part of the economy; who benefits and who is harmed by price ceilings and price floors?
4. How are price controls and illegal pricing in black markets related? Do consumers benefit from a black market?
5. Many contend that the minimum wage law in the U.S. contributes to unemployment. How can this be?
Why does economics emphaze making decisions at the margin rather than in total values?
2. Many people today are overweight; how does this fit in with dimishing marginal utility or does food have a constant or increasing marginal utility?
3. Assume Mary is currently paying $3 for each unit of good X which yields her 12 units of marginal utility. She is also consuming Y at a price of $4 per unit and gets 20 units of marginal utility. Is she behaving optimally or not and why?
4. What are the income and substitution effects of relative price changes? (You may want to refer to Appendix F.)
5. How does consumer demand relate to diminishing marginal utility?
Marginal Revenue (MR)= $105
Total Cost (TC)=$1,200 + 135Q -0.6Q^2
Marginal Cost (MC)=…
PRINCIPLE #1: PEOPLE FACE TRADEOFFS
The first lesson about making decisions is summarized in the adage: “There is no such thing as a free lunch.” To get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading off one goal against another.
Consider a student who must decide how to allocate her most valuable re- source—her time. She can spend all of her time studying economics; she can spend all of her time studying psychology; or she can divide her time between the two fields. For every hour she studies one subject, she gives up an hour she could have used studying the other. And for every hour she spends studying, she gives up an hour that she could have spent napping, bike riding, watching TV, or working at her part-time job for some extra spending money.
Or consider parents deciding how to spend their family income. They can buy food, clothing, or a family vacation. Or they can save some of the family income for retirement or the children’s college education. When they choose to spend an extra dollar on one of these goods, they have one less dollar to spend on some other good.
When people are grouped into societies, they face different kinds of tradeoffs. The classic tradeoff is between “guns and butter.” The more we spend on national defense to protect our shores from foreign aggressors (guns), the less we can spend on consumer goods to raise our standard of living at home (butter). Also important in modern society is the tradeoff between a clean environment and a high level of income. Laws that require firms to reduce pollution raise the cost of producing goods and services. Because of the higher costs, these firms end up earning smaller profits, paying lower wages, charging higher prices, or some combination of these three. Thus, while pollution regulations give us the benefit of a cleaner environ- ment and the improved health that comes with it, they have the cost of reducing the incomes…
First I
need to summarize thefourmajor
pieces of legislation collectively known as the Antitrust Laws.
Then
identify thethreemain regulatory commissions of
industrial regulation and explain how these govern industrial regulations and
explain the major functions of the fiveprimary federal
regulatory commissions that govern social regulation.
Student ID: 21601839 Exam: 050473RR -GDP, GROWTH, AND STABILITY When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer. 1.
Student ID: 21601839 Exam: 050473RR -GDP, GROWTH, AND STABILITY When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer. 1. Which one of the following is used to measure directly the average standard of living across countries? A. Purchasing power parity B. GDP per person C. Real GDP D. Nominal GDP 2. The total amount of income earned by U.S. resource suppliers in a year, plus taxes on production and imports, is measured by A. gross domestic product. B. disposable income. C. national income. D. personal income. 3. The business cycle depicts A. the phases a business goes through from when it first opens to when it finally closes. B. the evolution of technology over time. C. short-run fluctuations in output and employment. D. fluctuations in the general price level. 4. In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates? A. Expansion B. Peak C. Recession D. Trough 5. Most economists agree that the immediate cause of most business cycle variation is A. the growth and subsequent bursting of financial bubbles. B. an unexpected change in the level of total spending. C. an unexpected change in the productivity of workers. D. the invention of new products.
6. Modern economic growth refers to countries that have experienced an increase in A. real output spread evenly across all sectors of the economy. B. real GDP over time. C. nominal GDP over time. D. real output per person. 7. Innovations such as the microchip and the Internet lead to business cycle variations because A. they cause prices to be sticky. B. the central bank will…
Prepare an analysis of the key macro and micro economic
factors which impact on the current UK housing market
The aftermath of the Queensland Floods has brought with it intense debate on how to pay for the recovery. Perhaps the debate should take a longer-term perspective.
Climate scientists have predicted global warming will bring with it more extreme weather events. If they are correct, we will have to learn to live with more intense floods, droughts, fires, and with the increased threat of tsunamis or freak tides. Queensland has dominated our minds because of the sheer size of the floods and their impact on such a major city as Brisbane.
The aftermath of the Queensland Floods has brought with it intense debate on how to pay for the recovery. Perhaps the debate should take a longer-term perspective.
Climate scientists have predicted global warming will bring with it more extreme weather events. If they are correct, we will have to learn to live with more intense floods, droughts, fires, and with the increased threat of tsunamis or freak tides. Queensland has dominated our minds because of the sheer size of the floods and their impact on such a major city as Brisbane. But, concurrently, we also have record flooding in rural Victoria and intense heat, drought and fires in Western Australia. And what of other countries â reflect on the floods in Pakistan, and more recently in Brazil and Sri Lanka. They have been even more devastating, in terms of economic impact, and certainly in terms of loss of life.
The debate of what to do in the aftermath should logically turn to longer-term matters, of risk management, funding, insurance and private-versus-public sector responsibility for coping with such events â we will simply not get by with private donations and fundraising. Similarly, short-term political point-scoring over a one-off levy designed to pay for the Queensland damage should not divert our attention from the real need: considered, strategic planning to cope with future natural disasters.
Insurance: Is the private insurance sector capable of servicing the needs of private business and households in the face of major natural disasters, such as our recent floods, our future fires and sea-storm surges? Would a market price for such insurance be so high as to be out of the reach of many? Should the government imposes compulsory insurance on motorists, so should it do so for households in fire- and flood-prone areas? Or should we go down the route of a national government-controlled natural-disaster insurance safety-net scheme, with compulsory premiums and levies?
Private property: Should the…
Little in details needed
must write a 1750-2450 word paper regarding maximizing profits with in market. There are certain topics that need to be touch I will give you the details if you are interested… THIS NEEDS TO BE WRITTEN BY YOU not taken from the internet.
Define the different types of unemployment. Explain which type of unemployment is most directly related to the economic circumstances which led to the change in the manufacturing base in Toledo, Ohio. How did the change in manufacturing from auto parts to solar panel glass parts address this type of unemployment in Toledo, Ohio?
1. If the total issues in an economy are Rs 4,50,000, the financial interrelations ratio is 1.17, and the new issue ratio is 0.72, what will be the net capital formation in the economy?2.Assume that the national income of a country is 96,000 currency units, the net capital formation is 15,000 currency units, and the total issues are 24,000 currency units. Determine the financial interrelation ratio?3.Assume that an economyâs net capital formation is Rs 98,667.3, its primary issues are Rs 63147, and its financial interrelations ratio is 1.21. What will be the primary issues in the economy if the intermediation ratio is 0.72?4.NDP at factor cost in an economy is Rs. 15,311. If the net factor income from abroad is Rs 51 and the subsidies are Rs 402, what will be the national income?5.If the marginal revenue of a product is Rs 12 and the demand elasticity is 1.5, what will be the average revenue of the product?6.Assume that an automobile dealer knows the demand variations in the industry from his past experience. According to him, price elasticity of demand for cars is unitary (=1). The price of the cars is currently Rs.20,000 and the dealer wants to increase the quantity demanded from 30 units to 60 units. At what price should the dealer sell the cars if he has to sell 30 additional cars?
Homework Assignment 3
Due on Sunday, 12/15 by 11:55pm
Instruction:
The due date for this homework assignment is indicated above. Please submit it through the Assignments tab on Oncourse. No email and message submissions please. Please refer to the portion of Lorenz curve and Gini ratio in Chapter 19 for this homework.
Hints:
Lorenz curve graphs the cumulative percentage of income against the cumulative percentage of households.
Homework Assignment 3
Due on Sunday, 12/15 by 11:55pm
Instruction:
The due date for this homework assignment is indicated above. Please submit it through the Assignments tab on Oncourse. No email and message submissions please. Please refer to the portion of Lorenz curve and Gini ratio in Chapter 19 for this homework.
Hints:
Lorenz curve graphs the cumulative percentage of income against the cumulative percentage of households. For questions 1 to 3, please find the points on the curve that correspond to the specific group of households, for example, the richest 20 percent of household, then the difference between the vertical cumulative percentages of income is the percentage of total income that is received by that group. For question 4, if the income is equally distributed, it means the Lorenz curve overlaps the line of equality. This will be an extreme case of income distribution. It should be easy for you to figure out the answer because everyone is equally rich or poor. For question 5, you need to understand how inequality is measured using Lorenz curve. If the Lorenz curve is skewing away from the line of equality, it means the income distribution of the society is ??? For last question, Gini ratio is the ratio of the area between the line of equality and the Lorenz curve to the entire area beneath the line of equality. The areas needed for this calculation are given in the question.
Good Luck!!!
In the figure above, what percent of total income is received by the richest 20 percent of households?
In the figure above, what percent of total income is received by the poorest 40 percent of households?
In the figure above, what percent of total income is received by the second richest 20 percent of households?
In the figure above, if income were distributed equally across all households, the richest 20 percent of households would receive what percent of total income?
If a Lorenz curve for a countryâs income bows more rightward over time, what is the…
Education is an example of a positive externality: acquiring more education benefits the individual student and having a more highly educated work force is good for the economy as a whole.
The accompanying table illustrates the marginal benefit to Sian per year of education and the marginal cost per year of education. Each year of education has a marginal external benefit to society equal to $8,000. Assume that the marginal social cost is the same as the marginal cost paid by an individual student.
|
Quantity of Education (in years) |
Sian s Marginal Benefit per year |
Sian s Marginal Cost per year |
|
9 |
– |
– |
|
10 |
$20,000 |
$15,000 |
|
11 |
19,000 |
16,000 |
|
12 |
18,000 |
17,000 |
|
13 |
17,000 |
18,000 |
|
14 |
16,000 |
19,000 |
|
15 |
15,000 |
20,000 |
|
16 |
14,000 |
21,000 |
|
17 |
13,000 |
22,000 |
|
Years of Education |
Sian s marginal benefit per year |
Marginal external benefit to society |
Marginal social benefit |
Sian s marginal cost per year |
|
9 |
– |
– |
– |
– |
|
10 |
$20,000 |
$8,000 |
|
$15,000 |
|
11 |
19,000 |
8,000 |
|
16,000 |
|
12 |
18,000 |
8,000 |
|
17,000 |
|
13 |
17,000 |
8,000 |
|
18,000 |
|
14 |
16,000 |
8,000 |
|
19,000 |
|
15 |
15,000 |
8,000 |
|
20,000 |
|
16 |
14,000 |
8,000 |
|
21,000 |
|
17 |
13,000 |
8,000 |
|
22,000 |
———————
References:
|
Unit 9 Assignment:Education a positive externality |
||
|
Content (13 points) |
Points Possible |
Points Earned |
|
Determined Siam s market equilibrium quantity of education. |
3 |
|
|
Correctly calculated the marginal social benefit schedule. |
2 |
|
|
Correctly calculated the socially optimal number of years of education. |
2 |
|
|
Use a tax or a subsidy to induce Sian to choose the socially optimal amount of education. |
3 |
|
|
Set the tax or subsidy per year of education. |
3 |
|
|
Analysis (7 points) |
|
|
|
Work demonstrates synthesis of concepts, research, and experience. |
3 |
|
|
Work demonstrates the student s ability to tie relevant information to real-life applications. |
2 |
|
|
Analysis exceeds basic comprehension to demonstrate higher-order thinking. |
2 |
|
|
Writing (5 points) |
|
|
|
Correct use of APA 6th edition format, all sources used to support the paper are referenced. |
2 |
|
|
Sentences are clear, concise, and direct; tone is appropriate, spelling, grammar, and punctuation are correct. |
3 |
|
|
Total |
25 |
|
1I am risk avers and trying to maximize my expected value of c0.5, were c is my fortune. I have 50.000 in cash and art to the value of 200.000 that I store i my basement. I live in an area, that sometimes experience big rainflots that can flood my basement. If my basement get flooded, my art will be worth 40.000. The likehood that my basement will be flooded is 1 percent. a What is my expected utility? b How much insurance should I buy to be fully insured? c What is a fair insurance premium? d What is my utility if I buy full insurance at the fair insurance price? 2A productionfunction is given by f(xa1xb2xc3), where a + b + c > 1. a Proof that the function is showing increasing returns to scale. 3Look at the costfunction c(y) = 3y2 + 22 a order AC(y), AVC(y) and MC(y) and illustrate the in a figure. b What output minimize AC(y)? c which output gives that AC(y)=MC(y) 4Look at a competetive market with many companies who all have identical costfunctions given by c(y) = 0.5y2 + 1 for y > 0 and c(0) = 0. It seems like we have a demand in the market at D(p) = 23 – p a Order the suplycurve Si(p) for each company b With n companies in the market, order the whole supplycurveS(p) for the industry. c What is the lowest cost we can have to sell products in this market? d How much will each company produce at this price? e How many companies will exist in this market at this price? 1
EC320 Summer 2011 Assignment 5 Chapter 16 questions
1. Economists have estimated the elasticity of demand for basic cable TV service at -0.51 and the elasticity of demand for direct broadcast satellite TV at -7.40. Your town wants to raise tax revenues from TV viewers and proposes taxes on both services. If the goal is to raise the revenue as efficiently as possible, what should the ratios of the cable tax to the satellite tax be?What assumptions underlie this calculation?
2. In 2002, Uncle Sam levied a tax of 3% on that part of a car’s price exceeding $40,000.
Discuss the efficiency, equity and administrability of this luxury car tax.
3. Peter the Great at one time taxed men’s beards (women, I presume where exempt!). He
thought beards were superfluous and useless. The tax was said to have been proportional
according to the length of beard and progressive according to the social position of its possessor. Evaluate Peter’s beard tax from the standpoint of optimal tax theory and from the standpoint of horizontal equity.
4. Suppose that Larry faces a marginal tax rate of 35%, and faces a 2% chance of being caught if he cheats on his taxes. Suppose the marginal penalty of tax evasion is 10I, where I is the amount of unreported income in thousands. How much income will Larry fail to report?
5. Indicate whether each of the following statements is true, false or uncertain, and explain why.
a) A proportional tax on all commodities including leisure is equivalent to a lump sum tax.
b) Efficiency is maximized when all commodities are taxed at the same rate.
c) Average cost pricing for a natural monopoly allows the enterprise to break even, but the
outcome is inefficient.
d) Tom’s workplace provides free access to a fitness room, Jerry’s does not. Horizontal equity requires that Tom be taxed on the value of having access to the fitness room.
Discuss market structures that are fundamentally different than the perfectly competitive market we…
I need it done in 10 hours, and all work shown. EXPERTS ONLY PLEASE!
ECON 201 –003, Assignment #3 Market Intervention Due Date: February 05, 2013 @13.00 1 Question 1: Market for lobster – Revisited (52 points) Consider again the market for Atlantic lobster presented in Q#1 of the previous assignment where the annual demand and supply for lobster is given by the following equations: 100 0.2 D P = – Q , and 25 0.1 S P = + Q , where P is the price per kg in dollars, QD and QS are respectively the quantity demanded and the quantity supplied (in thousand of Kgs). The government imposes a quota of 150 thousand of kgs per year in the lobster industry and licenses are issued to allocate the rights to harvest lobster. 1. Reconstruct the Demand and Supply curves in a graphing paper and show graphically the equilibrium price P* and quantity Q* for lobster in the absence of quota (8 points). 2. Denote the quota by Q and show it graphically. Calculate the demand price and the supply price under this quota and show them graphically (7 points). 3. Calculate the quota wedge (the quota rent) per Kg of lobster when 150 thousand of Kgs are sold? (7 points) Another way to achieve the same reduction of the harvested lobster at 150 thousand of kgs per year is by imposing an excise tax. Consider now that the government imposes an excise tax that is officially paid by the fishing industry. 4. Find the excise tax rate (in dollars) and fully explain how does the tax work (i.e. which side of the market will it affect and how) by illustrating your answers graphically (8 points) 5. Calculate the tax revenue collected by the government in this scenario and show it in the graph (7 points).
ECON 201 –003, Assignment #3 Market Intervention Due Date: February 05, 2013 @13.00 2 6. Calculate the incidence of the tax (i.e. the portion paid by each party per kg), show it graphically and identify which party (consumers/producers) pays the heavier tax burden. Illustrate graphically (10 points) 7. Comment briefly on positive effects (if any) of these policies (5 points)…
Evaluate the following statement: Even if the prices of a large number of goods and services in the economy increase dramatically, the real GDP for the economy can still fall.
Question 1Read the article titled “Contracting Risk: A Quick Guide to Proper Risk Allocation Through Contracts for Subcontractors,” located at http://www.thehumanequation.com/en/news_rss/articles/2005/Quick_Guide_To_Proper_Risk_Allocation_Through_Contracts_for_Subcontractors.aspxhttp://www.thehumanequation.com/en/news_rss/articles/. Explicate the major risks involved in subcontractor contracts. Then, determine which of the risks involved holds the most risk to the subcontractor. Support your response with evidence or examples. Question 22.1 Real options are useful when a manager wants to make adjustments for risk in capital projects. Suggest ways to determine the need for such an option.2.2 Transaction costs are inherent in the trade-off between risks and uncertainties. Propose how one can determine the efficient levels of information in an organization to justify taking risk over uncertainty. https://blackboard.strayer.edu/webapps/blackboard/execute/uploadAssignment?content_id=_4251230_1&course_id=_55389_1&assign_group_id=&mode=viewQuestion 33.2. How does your analysis of VMP change if the employer is a monopolist producerof its output but a price-taker in the labor market?3.19. Most restaurant customers tip according to a percentage rule—between 15 and 25percent of the bill. Diners who have dinner and a $20 bottle of wine usually paythe same percentage of the bottle price as diners who order a $100 bottle. Why,when the same efforts must be made to uncork and pour both bottles?3.3. Lenders perceive that you are risky, so you must pay 12 percent annual interest toborrow from one of them. You only receive 6 percent on funds you have depositedin the bank. Do the opportunity costs of borrowing and using your own fundsdiffer in this example? Explain why or why not.3.17. Devise a hypothetical business situation in which buying a lookback call option ona commodity may be a sound strategy for you. How about a down-and-out calloption?
a. Calculate net exports.
b. Calculate GDP.
c. Calculate National Income.
d. Assume the GDP deflator is 120 in 2010. Calculate real GDP in 2010.
In 150 to 200 words, explain your reasoning for the way you are planning on using Reserve Requirements. Be sure to address the following:
1. How Reserve Requirements affect the economy
2. How your action will affect economic growth
3. Why it is important to increase economic growth
4. Your rationale for the use of Reserve Requirements
At the end of the game, you will be provided with this information to give to your instructor.
In 150 to 200 words, explain your reasoning for the way you are planning on using the Discount Rate. Be sure to address the following :
1. How the Discount Rate can affect the economy
2. How your action will affect economic growth
3. Why it is important to slow economic growth
4. Your rationale for the use of the Discount Rate
At the end of the game, you will be provided with this information to give to your instructor.
In 150 to 200 words, explain your reasoning for the way you are planning on using Open Market Operations. Be sure to address the following :
1. How Open Market Operations affect the economy
2. How your action will affect economic growth
3. Why it is important to increase economic growth
4. Your rationale for the use of Open Market Operations
At the end of the game, you will be provided with this information to give to your instructor.
Scenario 1
In 150 to 200 words, explain your reasoning for the way you are planning on using Reserve Requirements. Be sure to address the following:1. How Reserve Requirements affect the economy2. How your action will affect economic growth3. Why it is important to increase economic growth4. Your rationale for the use of Reserve RequirementsAt the end of the game, you will be provided with this information to give to your instructor.
Answer:
Type your response here…
Scenario 2
In 150 to 200 words, explain your reasoning for the way you are planning on using the Discount Rate. Be sure to address the following :1. How the Discount Rate can affect the economy2. How your…
This is for Academia the questions need to be corrected as asked in a previous question, please see the comments on the PDF document in yellow.
Please correct the line drafts are still missing. These are line graphs
QUESTION 5
5. Use each scenario below to indicate graphically how the equilibrium price and – quantity of
motor vehicles will change. Also provide a brief motivation for each graph
5.1.1 The interest rate in the South African economy has decreased by 4,5% during the past
six months
you did not understand the question. you merely had to used a simply downward sloping linear demand curve and upward sloping supply curve to show the scenarios!!!!!1
Q5 =0/12
KUMBA increased the steel prices from 1,000 USD to 1,150 USD (line graph)
FRANK ROODT Student number: 8069 – Comments
Assignment 2
Question 1
In this question you only got one wrong that 1.18, the answer is supposed to be D but you wrote A
Question 2
You did not include the graph hence you did not answer the question. You lost about 12marks
Question 3
All your formulas are wrong hence the figures for your answers are wrong. You lost 5marks. As an example I have provided you with two of the correct formulas
GNP @mp: GDP @ mp â net factor payments to foreign countries
NNP @ mp: GDP @mp âprovision for depreciation-net factor payments to foreign countries
Question 4
You omitted the macro economic stability – Equitable distribution of national income. You lost 2 marks
Question 5
You lost 20 marks because you misunderstood the question. The types of unemployment are: frictional, structural, seasonal and cyclical. These are the ones you were supposed to discuss
Question 6
You lost 7 marks because you did not match the correct column A to column B. I have highlighted them in yellow.
Question 7
Your formulas are still incorrect.
Question 8
8.1 Who is the Minister of Finance, NOT the function. You were just supposed to mention his name
8.3 Said in table format and you did not include a table at all
Q1 = 19/20
Q2 = 0/12
Q3 = 0/5
Q4 = 8/10
Q5 = 3/23
Q6 = 3/10
Q7 = 1/5
Q8 = 5/15
Total = 39/100 – 39%
My comment is read more and please make sure you understand the question before answering it.
Assignment 1
Question 1
1.4 is incorrect. The correct is D
Question2
You lost marks because you did not include the figures in the graph you draw
Question 3
3.1 You lost marks because you did not draw graphs, the question says with the aid of GRAPH. You only wrote
Question 4
Everything is correct
Question5
You lost 12 marks on this question because you misunderstood the question. You were only expected to use a simple demand and supply and say what which of the two shifts. Read chapter 8 in the text book
Question…
If
nominal GNP increases at a rate of 10 per cent per year while the
GNP deflator increases at 8 per cent
per year, then
I have 4 questions. And I need them after 5 hours from now:
1-
Which of the following is not assumed when setting up a production possibilities frontier? _______ A) Labor, capital, and natural resources are fixed and unchanging. B) Only two outputs are produced. C) Any level of output is currently possible. D) The level of technology is fixed and unchanging.
2-
When producing more and more of one good along a bowed out production possibilities frontier which of the following happens ______ A) The amount of the good being produced in smaller quantity gets larger and larger. B) The amount of the good being produced in larger quantity gets smaller and smaller. C) None of these occur. D) All of these occur.
3
–
11) The slope or rate of change along a production possibilities frontier ______ A) measures the opportunity cost of producing one more unit of a good. B) has no economic relevance or meaning. C) is always varying. D) is always constant.
4
A shift outwards of the nation’s production possibilities frontier can occur from ______ A) a change in the amounts of one good desired. B) a natural disaster like a hurricane or bad earthquake. C) a reduction in unemployment. D) an increase in the labor force.
I need the Right Answers please!
a. What are the basic characteristics of monopolistic competition? List and explain the three most important characteristics.
b. How can the firm in monopolistic competition attract customers to its business? Identify and briefly explain 3 forms of non-price competition.
c. The typical firm in a monopolistically competitive market does not earn long-run economic profit. Does that fact make it economically efficient? Explain why the firm will not able to earn long-run economic profit. (20 points)
PLS HELP ME TO SOLVE THOSE QUESTIONS..
5-If a bond dealer bought a $100,000 municipal bond at 92% of par and sold it at 96% of par, how much money did the dealer make on the bid-ask spread?
9-The one-year real rate of interest is currently estimated to be 3 percent. The current annual rate of inflatio…
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Watch video and answer questions below:
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1. Compare and contrast Keynes’ and Hayek’s philosophies.
2. How would you deal with our country’s current economic problems? Would you use any ideas from Keynes and/or Hayek? Why or why not? Which?
3. How did the economy thrive after World War II without government stimulus? Is a stimulus ever needed? If so, in what situations?
4. Can war be “good”? Why do some people suggest that war can help the economy? Do you agree? Why or why not?
5. Research the Broken Window Fallacy or describe what you already know about it. Explain why it does or does not apply to this issue.
6. Can we spend our way to prosperity? Why or why not?
A) Calculate the total unemployment rate.
C) What would happen to the growth rate of the money supply if foreigners lost confidence in the US dollar as a result of recent financial crisis in the US economy and the Fed was trying nonetheless to maintain its current historic low federal funds rate target? Explain briefly. 5 pts.
Hint: Please keep in mind that the question asked whether money supply growth rate will increase or not (by the Fed) and why so.
d) Using the Keynesian Cross model diagram (The diagram with 45 degree line by splitting AD (C+I+G+NX) on the vertical axis and RGDP on the horizontal axis, See in Ch. 9,10 & 13 of the textbook) and equation, critically and briefly illustrate the short run and long run economic impact of Obama’s stimulus package of $862 billion. (Hint: The impact will be in terms of major macroeconomic variables of US economy such as GDP growth, unemployment rate, interest rates, and inflation.) 5 pts.
4.4. Mirk Labs is a British pharmaceutical company that currently enjoys a patent monopoly in
Europe, Canada, and the United States on Zatab , an allergy medication The global demand for Zatab is
Qd = 15.0 -0.2P
Where Qd is annual quantity demanded ( in millions of units) of Zatab, and P is the wholesale price of Zatab per unit. A decade ago, Mirk Labs
incurred $60 million in research and development costs for Zatab. Current production costs for Zatab are constant and equal to $5 per unit.
a. What wholesale price will Mirk Labs set? How much Zatab will it produce and sell annually? How much annual profit
does the firm make on Zatab?
b. The patent on Zatab expires next month, and dozens of pharmaceutical firms are prepared to enter the market with
identical generic versions of Zatab. What price and quantity will result once the patent expires and competition emerges in this market? How much consumer
surplus annually will allergy sufferers who take Zatab gain?
c. Calculate the annual deadweight loss to society due to drug firm’s market power in Zatab. What exactly does this
deadweight loss represent?
d. Given your answer to part c, would it be helpful to society for competition authorities in Europe, Canada, and the
United States to limit entry of generic drugs to just five years for new drugs?
MB1(x)= 20 – 10x; MC1(x)=5
Firm 2’s benefits from firm 1’s R&D are given by MB2 (x) = 2 – x
(i) What is firm 1’s optimal choice of R&D if it does not…
(b) In a closed economy with government sector, equilibrium national income
occurs where aggregate output (Y) equals desired aggregate expenditure (E).
Given that the consumption, investment and government expenditure
schedules respectively are:
C=40+0.8Yd
I=40
G=35
where disposable income (Yd) is equal to
Yd=(1-t)Y
and the marginal tax rate (t) is 0.
(b) In a closed economy with government sector, equilibrium national income
occurs where aggregate output (Y) equals desired aggregate expenditure (E).
Given that the consumption, investment and government expenditure
schedules respectively are:
C=40+0.8Yd
I=40
G=35
where disposable income (Yd) is equal to
Yd=(1-t)Y
and the marginal tax rate (t) is 0.25
i) What is the equilibrium level of national income?
ii) What is the level of savings at the equilibrium income level?
iii) What is the value of the marginal propensity to save, and the multiplier?
(c) The following information is available within a Keynesian income-expenditure
framework of the economy, where Yd is disposable income, t is the marginal
tax rate and T is the governmentâs tax revenue:
C=120+0.75Yd
I=55
G=35
T=tY
t=0.2
Yd=(1-t)Y
By how much should the government increase its expenditure to raise national
income up to a level of 610? Will the government be running a budget deficit/surplus?
a. Is the firm earning any economic profit currently? How much is its profit or loss?
b. Is the firm maximizing its economic profit? How do you know? What should the firm do to maximize profit? Should it increase or decrease output?
c. Given your answers in part b, how will the market adjust to reach long-run equilibrium? What will happen to the economic profit in the long-run? Include appropriate graphs for the market and the typical firm in your explanation.lp me understand this chemistry problem…
If fixed costs are $40,500 per period, variable costs are $12.50 per unit, are revenue is $20.00 per unit, how many units must be made and sold each period (a)
to break even and (b) to earn a profit of $15,000 per period
In 1999 Mercedes-Benz USA adopted a new pricing policy, which it called NFP (negotiation-free process), that sought to eliminate price
negotiations between customers and new-car dealers. An article in The New York Times (August 29, 1999) reported that a New Jersey Mercedes dealer who had his
franchise revoked is suing Mercedes, claiming that he was fired for refusing to go along with Mercedes’ no-haggling pricing policy. The New Jersey dealer said
he thought the NFP policy was illegal Why might Mercedes’ NFP policy be illegal?
Can you offer another reason why the New Jersey dealer might not have wished to follow a no-haggling policy?
A share of ownership in a public company is a
Bond.
Stock.
Certificate of deposit.
Money market account.
The economy begins in long-run
equilibrium. Then one day, the president appoints a new chairman of
the Federal Reserve. This new chairman is well-known for his view
that inflation is not a major problem for an economy.
A.)How would this news affect
the price level that people would expect to prevail?
B.)How would this change in the
expected price level affect the nominal wage that workers and firms
agree to in their new labor contracts?
C.)How would this change in the
nominal wage affect the profitability of producing goods and services
at any given price level?
D.)How does this change in
profitability affect the short-run aggregate-supply curve?
E.)If aggregate demand is held
constant, how affect the price level and the quantity of output
produced?
F.)Do you think this Fed
chairman was a good appointment?
Price level Real GDP demanded Real GDP Supplied in the short run
75 600 400
85 550 450
95 500 500
105 450 550
115 400 600
125 350 650
135 300 700
a. Draw a graph of the aggregate demand curve and the…
Different market structures areprevailing in our different sectors like agriculture, power supply,transport industry, cement industry, restaurants, etc. Analyze andcompare the characteristics of all market structure with respect tothe given sectors.
Calculate the four types ofelasticities by taking the examples from your dailylife.
A B C D E F G
1 Y C I G X M
2 A 100 110 50 60 60 15
3 B 200 170 50 60 60 30
4 C 300 230 50 60 60 45
5 D 400 290 50 60 60 60
6 E 500 350 50 60 60 75
7 F 600 410 50 60 60 90
a….
A. Every worker requires exactly one machine to work with;l no substitution is possible.
B. Capital and labor are perfect substitutes.
C. The firm is able to suubstitute capital for labor, but they are not perfect substitutes.
(b) In a closed economy with government sector, equilibrium national income
occurs where aggregate output (Y) equals desired aggregate expenditure (E).
Given that the consumption, investment and government expenditure
schedules respectively are:
C=40+0.8Yd
I=40
G=35
where disposable income (Yd) is equal to
Yd=(1-t)Y
and the marginal tax rate (t) is 0.
(b) In a closed economy with government sector, equilibrium national income
occurs where aggregate output (Y) equals desired aggregate expenditure (E).
Given that the consumption, investment and government expenditure
schedules respectively are:
C=40+0.8Yd
I=40
G=35
where disposable income (Yd) is equal to
Yd=(1-t)Y
and the marginal tax rate (t) is 0.25
i) What is the equilibrium level of national income?
ii) What is the level of savings at the equilibrium income level?
iii) What is the value of the marginal propensity to save, and the multiplier?
(c) The following information is available within a Keynesian income-expenditure
framework of the economy, where Yd is disposable income, t is the marginal
tax rate and T is the governmentâs tax revenue:
C=120+0.75Yd
I=55
G=35
T=tY
t=0.2
Yd=(1-t)Y
By how much should the government increase its expenditure to raise national
income up to a level of 610? Will the government be running a budget deficit/surplus?
The Fed sells $10,000,000 in bonds to Jim, a bond dealer who pays for the bonds with a check drawn on his bank. Assume a 10% required reserve ratio. Which of the following statements correctly records this transaction at Jim’s bank with respect to the bank’s reserves?
The bank’s reserves will go up by $1,000,000.
The bank’s reserves will go down by $10,000,000.
|
The bank’s reserves will go up by $10,000,000. |
||
|
The bank’s reserves will go down by $100,000,000. |
BACHELOR OF COMMERCE YEAR 1 -ACADEMIC CALENDAR 9.6.4 ECONOMICS 1: ASSIGNMENT 1 DUE DATE FOR SUBMISSION: 1JUNE 2011 QUESTION 1 Define each of the following terms: [20] 1.1 1.2 1.3 1.4 Opportunity Cost Disequilibrium Comparative Advantage Producer Surplus (5) (5) (5) (5) QUESTION 2 [40] 2.1 Write an essay explaining that the quantities of goods and services that we can produce are limited by both our available resources and by technology. Assume we want to increase production of one good. illustrate the limit to what we can produce.
BACHELOR OF COMMERCE YEAR 1 -ACADEMIC CALENDAR 9.6.4 ECONOMICS 1: ASSIGNMENT 1 DUE DATE FOR SUBMISSION: 1JUNE 2011 QUESTION 1 Define each of the following terms: [20] 1.1 1.2 1.3 1.4 Opportunity Cost Disequilibrium Comparative Advantage Producer Surplus (5) (5) (5) (5) QUESTION 2 [40] 2.1 Write an essay explaining that the quantities of goods and services that we can produce are limited by both our available resources and by technology. Assume we want to increase production of one good. illustrate the limit to what we can produce. A diagram will enhance your answer (Your explanation should include preferences and marginal benefit) (20) 2.2 A government tax on luxury goods changes the equilibrium price and quantity of those goods. Discuss the implications for consumer surpfus. producer surplus and welfare. Use relevant diagrams to support your answer. (20) QUESTION 3 [40] 3.1 How would Total Revenue change if there was a price increase on the elastic part of the demand curve? (10) 3.2 Using a diagram discuss how a perfectly competitive firm maximises benefit to society as a whole. (10) 3.3 3.4 There are several obstacles to efficiency that can exist. Describe these with the use of examples. “It is noted that there exists a diminishing product of labour”. Explain the above statement. REGENT BUSINESS SCHOOL -JANUARY 2011 (10) (10) 32
a. Define the concept of labour productivity.
b. Given the definition of labour input requirement given above, what is the relationship between labour productivity and labour input requirement in this example?
c. Derive the labour productivities for the two countries in the two sectors and enter them in a table as Table 2 below:
Table 2 â labour productivity
F M
A
B
d. What is the pattern of absolute advantage between the two countries?
e. What is the pattern of comparative advantage between the two countries?
f. Given your answers above, which country should export F and what country should export M?
Answer the question(s)based on the following price and output data over a five-yearperiod for an
economy thatproduces only one good. Assume that year 2 is the baseyear.
Year Unitsof Output Price per unit1 &nb…
o In your chosen industry, is price elasticity of demand considered elastic or inelastic? Are there substitutes available? Is the good a luxury or a necessity? Explain.
o What is the price elasticity of supply for your chosen industry? Explain.
Exam: 050474RR – MACROECONOMIC MODELS AND FISCAL POLICY
When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you
hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam.
Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer.
1. Which one of the following statements about fiscal policy is correct?
A.
Exam: 050474RR – MACROECONOMIC MODELS AND FISCAL POLICY
When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you
hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam.
Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer.
1. Which one of the following statements about fiscal policy is correct?
A. Fiscal policy refers to the altering of the interest rate to change aggregate demand.
B. Fiscal policy refers to the manipulation of government spending and taxes to stabilize domestic output, employment, and the price level.
C. Fiscal policy refers to the fact that equal increases in government spending and taxation will be contractionary.
D. Fiscal policy refers to the manipulation of government spending and taxes to achieve greater equality in the distribution of income.
2. Which one of the following statements about the standardized budget is correct?
A. The standardized budget tells us the actual budget deficit or surplus realized in any given year.
B. The standardized budget tells us that in a full-employment economy the federal budget should be in balance.
C. The standardized budget tells us that tax revenues should vary inversely with GDP.
D. The standardized budget tells us what the size of the federal budget deficit or surplus would be if the economy was at full employment.
3. An economist who favors smaller government would recommend _______ during recession and
_______ during inflation.
A. increases in government spending; tax increases
B. tax cuts; reductions in government spending
C. tax cuts; tax increases
D. tax increases; tax cuts
4. In the aggregate expenditures model, it’s assumed that investment
A. doesn’t change when real GDP changes.
B. doesn’t respond to changes in…
Note: If necessary, round your answer to two decimal places.
| a) | AreCandYpositively related or are they negatively related?
|
ECON 2013 – Assignment #2 _ 2012
Abdul was an actor and spends all of his disposable income on attending either plays or movies. He likes plays exactly 3 times as much as he likes movies.
Draw Abdul’s indifference map.
Suppose he has a disposable income of $120/month. If tickets cost $12 for plays and $3 for movies, show his budget line and indicate the highest attainable indifference curve. How many movies and how many plays will he see in a month?
Suppose play tickets remain at $12, but movie ticket prices rise to $5. Now what will be Abdul’s monthly demand for movies and plays?
Militsa is indifferent between consuming four slices of pizza and one beer and three slices of pizza and two beers. She prefers a bundle containing three beers and one pizza slice to either of the two bundles mentioned earlier. Do Militsa’s preferences show diminishing marginal rates of substitution? Explain.
A new telephone company, Rugers, has offered you two cell-phone calling options.
Plan A: Pay $0.05/call.
Plan B: Pay $2/week which includes 30 free calls per week. Any calls over 30 in a week are charged at $0.05/call.
Assume you have $12/week to spend on telephone calls and the composite good. Graph your budget constraint under the two plans. Make note of anything that seems strange.
Freya spends $6/week total on grape juice and kiwi juice. Grape juice costs $2/cup while kiwi juice costs $1/cup. Freya believes that 1 cup of grape juice is a perfect substitute for 3 cups of kiwi juice. Find her optimal consumption bundle of grape and kiwi juice each week. Now suppose that the price of kiwi juice rises to $2/cup. How much additional income would Freya need to consume her original bundle (the bundle BEFORE the price of kiwi juice changed)?
Suppose a demand curve can be represented by the function Q = 100-50P.
Draw the demand curve and indicate the portions that are elastic, inelastic, and unitary elastic.
Without performing extra calculations, state at…
E=C+I+G
G=1100
T=1100
C=200+0.80(Y-T)
I=1300
1)find equilibrium level of income?
2)Determine the size of both the gov’t purchase and tax multipliers. What do they mean?
3)Assume that gov’t spending rises by 10% What would happen to the equilibrium level of output determined in question (1) above.
4)Assume that gov’t cut taxes by 10%. what would happen to the equilibrium level of output determined in question (1) above?
William Easterly; “The Elusive Quest for Growth”;MIT Press paperback;ISBN 9780262550420
WRITEWritepaper #1 covering Easterly;Chapters1, 2, and 3
Foreachof the assigned chapters, write an accurate summary (about 40 lines) of the message(s) that Easterly is conveying.REMEMBER:Your job is to tell me what you believe that Easterly told to you, but DO NOT quote him and DO NOT use simple rearrangements of his words (because neither exposes whether you understand the material).What you write must faithfully reflect what Easterly wrote and must not be distorted by any of your own attitudes or opinions.Carefully check your spelling and grammar; they account for 20% of your grade.Follow ALL of the composition rules in the Writing Guide as well as all instructions included in the syllabus sections REQUIRED PAPERS and PAPER GUIDELINES.Combine these three summaries into a single Word (or Rich Text) document.Cover the chapters in ascending order and precede each section with an appropriate label (Chapter 1 and Chapter 2).
Y= C+I+G
Y=7000
G=1000
T=1000
C=300+0.8(Y-T)-20r
I=1000-50r
a) Find national savings?
b)Find equilibrium real interest rate in the loanable funds market?
c) Assume government spending rises by 10%. Determine the impact on national savings and the real interest rate?
d) Consider the information and the equilibrium from part “b” above. Suppose firms want to invest more, so the investment function changes to I = 1200-50r. Determine the new equilibrium real interest rate? What happens to the level of investment?
. If everyone seeks a “free ride”?, what mix of output will be produced in a country?
Question 2
Costs. State if each of the following statements is true or false, and briefly explain each of your answers in one or two sentences.
The relevant cost for decision making is historical accounting cost.
A cost that has an opportunity value is a sunk cost.
Economies of scope are only achievable if economies of scale are present.
Costs. You are given the following long-run cost function:
TC = 100Q â 20Q2 + 1.5Q3
Describe the shapes of the total, average and marginal cost curves.
Monopoly and perfect competition.
Question 2
Costs. State if each of the following statements is true or false, and briefly explain each of your answers in one or two sentences.
The relevant cost for decision making is historical accounting cost.
A cost that has an opportunity value is a sunk cost.
Economies of scope are only achievable if economies of scale are present.
Costs. You are given the following long-run cost function:
TC = 100Q â 20Q2 + 1.5Q3
Describe the shapes of the total, average and marginal cost curves.
Monopoly and perfect competition. The perfectly competitive and monopolistic models of the firm depict two extreme forms of market structure. Does the MR = MC rule apply in both cases? In each case, what scope is there for competing on price?
Question 3
Risk concepts. State if each of the following statements is true or false, and briefly explain each of your answers in one or two sentences.
Political risk refers to the potential for different divisions within a corporation to engage in competitive behavior.
The cost of capital is the dividend rate that a company must pay to its shareholders.
Sensitivity analysis is a method of testing capital-budgeting exercises for potential risk factors.
Externalities. Explain why a government might be justified in using subsidies to overcome problems caused by certain externalities.
Competition and reform policy. Provide at least three examples of various approaches adopted by the Australian government or other governments to improve the efficiency of their economies. Explain how each has impacted on business and economic efficiency.
Initial Balance Sheet of MCB
Assets Liabilities
Loans = 90 D…
Using the aggregate demand-aggregate supply diagram, explain the impact of an appreciation of the U.S. dollar on the price level and real income in the short run. (5 pts.)
1
ECO 201 “?o Written Assignment
Individuals, firms, governments, and countries are faced with choices because all resources are scarce. A
production possibility curve (see below) measures the maximum combination of outputs that can be
achieved from a given number of inputs. In practice economists use a production possibility curve with
two goods to explain the concept of opportunity cost.
In the example below the two goods that a country can produce are health care and education.
Use the graph above to answer the following questions:
a. How many units can be produced if a country uses all of its resources on health care?
b. How many units can be produced if a country uses all of its resources on education?
c. If a country is currently producing 11 units of health care and 16 units of education, what is the
opportunity cost of producing 5 more units of education?
While a production possibility curve describes the possible combinations of output that can be produced
with a given set of inputs, it does not tell us who should receive, and in what amount, the health care and
education that gets produced. Write an essay of at least 300 words but no more than 600 words in
length that discusses how you would decide to distribute the health care and education that gets
produced. Your essay should explain the role of critical thinking and of Saint Leo’s core values in making
your decision.
Instructions
Please write a logically developed, unified essay that shows your understanding of the subject matter.
The essay should be between 300 and 600 words in length. Make sure that you have a thesis (a main
point that you are making) and develop it thoroughly and coherently. Use specific examples based on
empirical evidence (from direct observation or experience) and clear, standard English.
Why should the government set the growth rate of money supply same as the growth rate of GDP?
Won’t the growth of money supply bring about a fall in interest rate, hence an increased aggregate demand and GDP, worsening the inflation?
1. The following table shows demand and cost data for a pure monopolist.
|
Quantity demanded |
Price |
Total revenue |
Marginal revenue |
Total cost |
Marginal cost |
|
0 |
$17 |
$_____ |
$10 |
||
|
1 |
16 |
_____ |
$_____ |
18 |
$_____ |
|
2 |
15 |
_____ |
_____ |
23 |
_____ |
|
3 |
14 |
_____ |
_____ |
25 |
_____ |
|
4 |
13 |
_____ |
_____ |
27 |
_____ |
|
5 |
12 |
_____ |
_____ |
28 |
_____ |
|
6 |
11 |
_____ |
_____ |
32 |
_____ |
|
7 |
10 |
_____ |
_____ |
40 |
_____ |
|
8 |
9 |
_____ |
_____ |
50 |
_____ |
|
9 |
8 |
_____ |
_____ |
64 |
_____ |
|
10 |
7 |
_____ |
_____ |
80 |
_____ |
a. Complete the table by filling in the columns for total revenue, marginal revenue, and marginal cost.
b. Answer the next three questions using the data you calculated in the table.
(1) What output will the monopolist produce? _____________
(2) What price will the monopolist charge? _____________
(3) What total profit will the monopolist receive at the profit-maximizing level of output? _____________
1. In the following table are cost and demand data for a pure monopolist.
|
Quantity demanded |
Price |
Marginal revenue |
Average cost |
Marginal cost |
|
0 |
$17.50 |
|||
|
1 |
16.00 |
$16.00 |
$24.00 |
$24.00 |
|
2 |
14.50 |
13.00 |
15.00 |
6.00 |
|
3 |
13.00 |
10.00 |
11.67 |
5.00 |
|
4 |
11.50 |
7.00 |
10.50 |
7.00 |
|
5 |
10.00 |
4.00 |
10.00 |
8.00 |
|
6 |
8.50 |
1.00 |
9.75 |
8.50 |
|
7 |
7.00 |
“?o2.00 |
9.64 |
9.00 |
|
8 |
5.50 |
“?o5.00 |
9.34 |
9.25 |
|
9 |
4.00 |
“?o8.00 |
9.36 |
9.50 |
a. An unregulated monopolist would produce _________ units of this product, sell it at a price of $__________,
and receive a total profit of $__________.
b. If this monopolist were regulated and the maximum price it could charge were set equal to marginal cost, it
would produce __________ units of a product, sell it at a price of $___________, and receive a total profit of $________________. Such regulation would either
_____________ the firm or require that the regulating (bankrupt, subsidize) government _____________ the firm.
c. If the monopolist were regulated and allowed to charge a fair-return price, it would produce __________
units of product, charge a price of $__________, and receive a profit of $__________.
d. From which situation”??a, b, or c“??does the most efficient allocation of resources result? ____________ From which situation does the least efficient allocation result? ____________ In
practice, government would probably select situation _____.
2. Identify whether the following long-run conditions apply to a firm under pure monopoly
(M), pure competition (C), or both. Put the appropriate letter(s) (M or C) next to the condition.
a. There is the potential for long-run profits because price is greater than or equal to average total cost.
_______
b. The firm’s demand curve is perfectly elastic. _______
c. The firm maximizes profits at the output level where MC = MR.
_______
d. The firm exhibits productive efficiency because price is equal to the minimum average total cost.
_______
e. Price is greater than marginal revenue for each output level except the first. _______
f. There is an optimal allocation of resources because price is equal to marginal cost. _______
1.explain and show graphically how this market would be affected if south africa chose to be more healthy.
2.explain and show graphically how this market would be affected if there is an increase in the number of dairly farms that produce hormone-free milk and at the same time south africa consumers chose to be more healthy
3.if the income elesticity of demand for hormon-free milk is as +0.5, briefly define what this value means and what it implies about the nature of the product
Assume that total fixed cost equals $1,000,000. Calculate the values for the fol…
Two firms face a demand equation
given by: P=200,000 â6(q1+q2) where q1 and q2
are the outputs of the two firms.The
total cost equations for the two firms are given by:TC1=8000q1 and TC2=8000q2
If each of the firms sets its own output rate to
maximize its profits, assuming that the other firm holds its rate of output
constant, solve for the optimal output of each firm (q1* and q2*),
the optimal price (P*), and the profit of each firm.
Y=F(K,L)=K^1/3 L^2/3
a) What kind of returns to scale does this production function have?
b) what is the per worker production function?
c)Assuming no technological progress, find the steady state capital stock per worker output per worker and consumption per worker as a function of the savings rate, the population growth rate and the depreciation rate.
d) suppose the savings rate is 20% the population growth rate is 2% and the capital stock depreciates at 5% each year, find the steady state level of capital per-worker output per worker, and consumption per worker.
e) What happens to the steady state level of capital per worker, output per worker, and consumption per worker if the savings rate increases by 5 percentage points?
Principles of Economics: ECON11026
Term 1-2014
Assessment Item 1: 6 Quizzes. Total mark = 30%.
Please go to the ECON11026 Moodle course site to find the Quiz link in the assessment section to answer the questions based on chapters (1 to 5) related to first four weeks of study. There will be six (6) quizzes, each carrying 5% of the total weight = 30 marks. You will be given 30 minutes to answer 10 questions. Only one attempt will be allowed per quiz.
Assessment criteria for Written Assessment Items 2 & 3
(i) Use DADA acronym in structuring your answers to all questions in economics. (Definitions: define the key terms ; Assumptions: list or make assumptions as required; Diagrams: draw relevant graphs/tables and explain; and original Analysis: apply the theory to real life economic examples and explain) Read the notes on how to answer questions, write essays and analyse case studies in economics.
(ii) Concepts and key terms must be defined accurately and completely.
(iii) The assumptions upon which the analysis is based must be stated at the outset.
(iv) Diagrams must be drawn properly, correctly labelled and the relations they depict explained.
(v) Answers must be complete, addressing the specific tasks nominated in the questions.
(vi) Critical Analysis overall should be provided by relating economic theory to real-life economic examples of “Technology and Economic Change: Getting the Benefits from Technological Progress”, in the case study.
(vii) Sources must be acknowledged in-text and a list of references provided.
(viii) Where a question has more than one part, so too should the answer. Ensure complete coverage.
(ix) Students should refer to more than two textbooks and other on-line resources, articles, news items related to the questions in the case study.
(x) Plagiarism is a real concern, therefore, please remember to reference in-text and also provide a Reference list.
(xi) You must work on the assignment questions progressively each week—which will prevent you from asking for extensions. So please follow a weekly study schedule.
(xii) Remember an extension is not a gift, it is a burden.
Assessment Item 2 – Short Answer Questions
Due date:
28 April, Monday of Week 9
ASSESSMENT
Part A: Weighting:
30 % (2 marks for in-text referencing, presentation, clarity of explanation and evidence of reference list and 28 marks for the answer)
2
Length:
Approximately 1500-2000 words (Approx. 400-500 words each question, excluding graphs, tables and reference list)
It is a progressive assignment based on topics studied in weeks 5-8 covering chapters 6 to 10.
Please attempt each question on a weekly basis which will prevent you from asking for extensions.
Objectives
This assessment item relates to course learning outcomes 4 – 8 as listed in the course profile.
Question 1:
Refer to Chapters 6
(a) Define, illustrate and explain the method of price discrimination that the airline industry uses with an example. (2 marks)
(b) Explain the key assumptions of monopolistic competition. (1.5 marks)
(c) What impact does monopolistic competition have on efficient allocation of resources? Explain your answer. (1.5 marks)
(d) Assume that a monopolistically competitive industry is in long-run equilibrium. On a diagram like Figure 6.1 (textbook p.135), show the effect of a fall in demand on a firm’s price and profit in: (i) the short run; and (ii) the long run. (2 marks)
Total = 7 marks
Question 2:
Refer to Chapters 7 & 8
(a) The table-1 below gives the costs and benefits of an imaginary firm operating under perfect competition whose activities create a certain amount of pollution. (It is assumed that the costs of this pollution to society can be accurately measured.
Table-1
Output (units)
Price per unit (MSB) ($)
Marginal (private) costs to the firm (MC) ($)
Marginal external (pollution) costs (MEC) ($)
Marginal social costs (MSC MEC) ($)
1
100
30
20
50
2
100
30
22
52
3
100
35
25
60
4
100
45
30
75
5
100
60
40
100
6
100
78
55
133
7
100
100
77
177
8
100
130
110
240
(i) What is the profit-maximising level of output for this firm? (1mark)
(ii) What is the socially efficient level of output? (1mark)
(iii) Why might the marginal pollution costs increase in the way illustrated in this example? (1mark)
(b) To what extent can trade unions be seen to be:-
(i) an advantage, (a) workers in unions, (b) non-union members in firms where there is collective bargaining, (c) workers in non-unionised jobs? Explain. (2 marks)
(ii) a disadvantage to (i) workers in unions, (ii) non-union members in firms where there is collective bargaining, (iii) workers in non-unionised jobs? Explain. (2 marks)
Total = 7 marks
Question 3:
Refer to Chapter 9
(a) Explain and illustrate the concept of circular flow of income and the relationship between withdrawals and injections. (2.5 marks)
(b) In the circular flow of income, explain the effects of an increase in exports on the level of: (i) imports; (ii) net taxes; and (iii) GDP. (1.5 marks)
(c) What will be the consequence of planned injections being less than withdrawals on economic growth, unemployment, inflation and net exports? Explain. (3 marks)
Total = 7 marks
Question 4:
Refer to Chapter 10
(a) Go to the website of Fair Work Australia (www.fwc.gov.au) and find out what was the most recent minimum wage decision? What is its expected impact, if any, on the level of unemployment in Australia? (4 marks)
(b) The table below shows part of a country’s aggregate expenditure schedule (in $ billions).
GDP
100
120
140
160
180
200
220
National expenditure
115
130
145
160
175
190
205
(a) Define the concept of multiplier and show what the government expenditure multiplier is? (1 mark)
(b) Assume that full employment is achieved at a level of GDP of $200 billion. Will there be an inflationary or a deflationary gap, and what is its size? Illustrate and explain. (1 mark)
(c) By how much would government expenditure have to be changed in order to close this gap assuming that there is no shift in injections or withdrawals? (1 mark)
Total = 7 marks
ECON 11026: Assignment-2 Marking Sheet
Student Name: __________________________Student/Number: __________________
Question No
ECON11026 Part A
Marks Out of
Total Marks
Q1
a
2
b
1.5
c
1.5
d
2
Q2
a (i)
1
a (ii)
1
a (iii)
1
b (i)
2
b (ii)
2
Q3
a
2.5
b
1.5
c
3
Q4
a
4
b (i)
1
b (ii)
1
b (iii)
1
Referencing
1
Presentation
1
Total marks
Total marks out of 30
30
Additional Markers Comments:
_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Markers Name: __________________________ Date: _________________________
Assessment Item 3- Case Study
Due date:
Friday of Week 12
ASSESSMENT
Weighting:
40 % weighting (5 marks for in-text referencing & reference list, presentation, clarity of explanation and evidence of reading and research, original thinking backed by research supporting your argument/stance)
3
Length:
Approximately 2500 -3000 words
Case Study is based on topics covering week’s 9-12 and chapters 11 to 15.
Objectives
This assessment item relates to course learning outcomes 1 & 8 as listed in the course profile.
Case Study – Technology and Economic Change: Getting the Benefits from Technological Progress
Tasks to be undertaken:
• Read Chapter 13 in particular to get a good understanding of the theory of Government Policy. Other chapters are equally important to understand macroeconomic theory in context to the case.
• Read the case study on- Technology and Economic Change: Getting the Benefits from Technological Progress.
• Make notes, which will help you to answer the questions by applying the theory to real life example of economics at work, from the relevant chapters.
• Apply the DADA (Definitions, Assumption, Diagram and Analysis) while answering the economic questions. On campus students will be attempting some exercises in the workshop sessions. Off campus students should attempt weekly activities from the textbook boxed case studies. These exercises will help and guide you how to think like an economist. Look for theory and apply it to real life examples from “Case Study.
• Make sure you include in-text references and provide a reference list.
• The focus of your task for this assignment in the next four weeks is to elicit and apply economic concepts and theory to the problem discussed in the case, to grasp how long term economic grow is influenced by –technological change, and effects real life economics.
• Conduct research (find related articles) relevant to technology as the key factor in promoting economic development and long term growth. You will need this additional information to draw conclusions and justify your answers.
• In preparing your assignment, you need to ensure that you refer to the “essay writing guide for students studying economics” available on the course website in moodle. It is important in economics that you interpret the question clearly, use diagrams in an essay and write like an economist.
Technology and Economic Change: Getting the Benefits from Technological Progress
….a powerful new technology, such as that represented by the computer, fundamentally reorganises the infrastructure of our material world. It eliminates former alternatives. It creates new possibilities. It necessitates fresh choices.
Technology has always been a key element in economic development: whether machine technology in the industrial age or computer technology today. With investment in technology, not only is the productive capacity of resources increased, but the ability of business to create new products and production processes is enhanced.
Ultimately it is technology that is crucial for long-term economic growth. Without constant technological advance, economies are likely to stagnate and fall behind their rivals, as new products emerge and as markets grow.
So with each wave of technology, economies must change and adapt if they are to ‘stay in the game’. The high-technology wave, which the world economy is currently experiencing, is of massive proportions – and it is widely accepted that the wave is not as yet at its full height! Not only is it changing the structure of production, trade and international competitiveness, it is also changing employment patterns, skill requirements and the direction of investment. In addition, businesses have been forced to reorganise to reflect the enhanced flexibility that new technologies offer. Governments also have had to assess and reassess, in this new technological age, how they can best aid their industries in creating the right conditions to achieve economic success. In many respects these policies are quite different from those pursued in the past.
It is hardly surprising, then, to find that many aspects of economic life are reflecting this ever-changing technological position.
• The OECD economies are more strongly dependent on the production, distribution and use of knowledge than ever before. Output and employment are expanding fastest in high-technology industries, such as computers, electronics and aerospace. In the past decade, the high-technology share of OECD manufacturing production and exports has more than doubled, to reach 20 to 25 per cent. Knowledge-intensive service sectors, such as education, communications and information, are growing even faster. Indeed, it is estimated that more than 50 per cent of GDP in the major OECD economies is now knowledge-based.
• Investment is thus being directed to high-technology goods and services, particularly information and communication technologies. Computers and related equipment are the fastest-growing components of tangible investment. Equally important are more intangible investments in research and development (R&D), the training of the labour force, computer software and technical expertise. Spending on research has reached about 2.3 per cent of GDP in the OECD area. Education accounts for an average 12 per cent of OECD government expenditures … Purchases of computer software, growing at a rate of 12 per cent per year since the mid-1980s are outpacing sales of hardware. Spending on product enhancement is driving growth in knowledge-based services such as engineering studies and advertising. And balance of payments figures in technology show a 20 per cent increase between 1985 and 1993 in trade in patents and technology services.
Jobs and skills
The traditional view has been that technology destroys employment, as computerisation and automation dispenses with the need for labour. What employment is created by the new technology tends to be small scale and highly skilled and insufficient to offset the number of jobs lost. An alternative view is that technological change offers employment opportunities as new industries and new processes create new demands for labour.
But even if the technological revolution is creating job opportunities, it would appear that increasingly the acquisition of high-level skills is necessary if a worker is to attain both employment and higher wages. OECD figures suggest that the employment of high-skilled workers increased on average 2 to 3 per cent faster than that of low-skilled workers during the 1980s and early 1990s. For example, the average annual growth in employment of high-skilled workers over this period in the six richest OECD countries ranged from 1.9 per cent in Italy to nearly 3 per cent in Canada. The growth in employment of low-skilled workers, by contrast, ranged from -0.6 per cent in France to 1.4 per cent in the USA. Such trends are likely to continue as the technological revolution advances.
Not only are high-level skills going to be increasingly necessary to get a job, but they will be vital in supporting and maintaining levels of productivity growth. Does technological progress destroy jobs? The obvious answer may seem to be yes. After all, new technology often involves machines taking over jobs that were previously done by people. There is another view, however. This argues that a failure to introduce new technology and ultimately to remain competitive will offer an even worse long-term employment problem. Markets, and hence employment, will be lost to more efficient competitors.
The relative merits of each of these views are difficult to assess, since they depend greatly upon the type of technology, its organisation in the workplace and the market within which it is located. It is possible to identify four stages in the effects of new technology on jobs.
• Stage (1) Design and installation. Here labour requirements grow as first designers and then construction workers are employed. As construction/installation is completed, employment from this source will then disappear.
• Stage (2) Implementation. Here labour requirements decline, especially if the technology is concerned with improving existing processes rather than creating new products.
• Stage (3) Servicing. Maintenance and repair may have positive employment effects. This may gradually decrease over time as ‘teething troubles’ are eliminated, or it may increase as the stock of initially new machines begins to grow older.
• Stage (4) Market expansion. This represents the long-term impact of technology on employment levels as the improved and/or cheaper products lead to more sales.
The optimistic view holds that, historically, technology has generated more jobs than it has destroyed. Total employment today is much higher than a hundred years ago, and yet technological progress has allowed many goods and services to be produced with far fewer workers. What has happened is that increased output has more than compensated for the growth in labour productivity. There is no reason, say the optimists, why this process should not continue.
The pessimists, however, are less certain about the potential employment benefits of new technology. Even in growth industries, such as pharmaceuticals, electronics, optical technology and high-value plastics, there has been a decline in employment.
But cannot workers who are displaced from high-tech industries simply find jobs in other parts of the economy? There are two problems here. The first is that of structural unemployment. Displaced workers may not have the skills to take up work elsewhere. Clearly what is needed is a system of retraining that enables workers to move to alternative jobs. The second is that of income distribution. If the only alternative jobs are
relatively low-skilled ones in the service sector (cleaners, porters, shelf packers, check-out assistants, etc.), the displaced workers may have to accept a considerable cut in wages.
Productivity and knowledge networks
Any individual firm introducing a new technology or industrial process is likely to see an improvement in its productivity. To be truly beneficial to a country, however, such innovation must be diffused throughout the whole economy. The success or otherwise of technological diffusion depends on the knowledge network of the economy.
The success of enterprise, as of national economies, is determined by their effectiveness in gathering and using knowledge and technology. This may in turn reside in the tacit abilities of individuals and firms to link up with the right networks and use all relevant items of information. Increasingly, the ability to innovate and enhance technological performance depends on obtaining access to learning-intensive relations. The result is a society composed of networks of individuals and firms, usually linked electronically … Innovation stems largely from the feedback loops or the continuing interactions which exist between science, engineering, product development, manufacturing and marketing. It is fed by the interplay among the different institutions and individuals involved – firms, laboratories, universities and consumers. The patterns of technology-related interactions in a national economy combine to form national innovation systems which are composed of the contacts and flows between industry, government and academia in the development of science and technology. The links within this system, and its ability to diffuse knowledge and technology, influence the innovative performance both of firms and of economies as a whole.
Government policy and the new technological age
We have seen that both workers’ skills and a knowledge network are vitally important within the current technological revolution. In fact, the two are intimately related:
… [Skills] are essential to selecting, using and manipulating the knowledge which can be codified. The ability to select relevant information, to recognise patterns in information and to interpret and decode information is not easily bought and sold.
This aspect of new technology has significant implications for government policy. Workers require relevant training and education, and such training and education must be updated continuously. Education is thus at the centre of the knowledge-based economy.
Education, whilst of vital importance, is not the only target of government policy on technological diffusion. Governments in many advanced industrial economies have adopted some or all of the following measures:
• The promotion of innovation and the encouragement of greater levels of R&D.
• Support for small and medium-sized enterprises. SMEs have received particular attention because of their crucial role in enhancing innovation, creating employment and contributing to skills development, especially in high-tech areas.
• The improvement of infrastructure. This includes both physical transport, such as roads and railways, and information highways.
Massive investments in up-grading the telecommunications infrastructure, reform of regulation and advances in digital technology underlie the creation of the global information infrastructure. Digitisation has made possible the processing, retrieval, communication and dissemination of all forms of information worldwide.
• The protection of intellectual property by more effective use of patents and copyright. By reinforcing the law in these areas, it is hoped to encourage firms to take the risks of developing new products and commit themselves to research.
Sources: OECD Economic Observer, No 198, 200 and 204
Answer the following questions:
NOTE: Chapter reference refers to theory to be applied to this case with an example of any country. It is important that you apply the theory to a country (developed or a developing country) and show how by investing /not investing in constant technological advancement, economies are likely to stagnate and fall behind their rivals, as new products emerge and as markets grow.
Question 1: What is the significance of the observations made by OECD in this case study regarding “The OECD economies are more strongly dependent on the production, distribution and use of knowledge than ever before”? Why does OECD suggest that technology is the key element in economic development and long term economic growth?
Question 2: What are the causes of economic growth in potential output in the long-term? Apply the theory to illustrate and explain your answer with an example.
Question 3: In what areas of the economy jobs are growing more rapidly? Is this due to a lack of technological innovation in these areas? Explain your answer with an example.
Question 4: Why have rural regional areas generally seen a smaller decline in high-tech employment than urban areas, and in some cases seen an increase? Explain.
Question 5: In what way might the government and the business sector contribute to improving the knowledge networks with an economy to promote technological progress to achieve faster rate of economic growth?
ECON11026 –Assignment-3Marking Sheet
Student Name ______________________________________________ S/N_____________________________
Marking Criteria
Weight
Overall presentation
Structure and organisation of the paper
1
Clarity of expression
1
Evidence of wide reading and research (in-text and end-text referencing)
Application of theory to practice
7 x 5
Q 1
Q 2
Q 3
Q 4
Q 5
Define key terms, explain key issue and problem in the case
2
Identify and explain assumptions
1
Provide appropriately adapted graphical illustration/s with explanation
2
Provide critical analysis of the question drawing theory from relevant chapter topics
2
Provide conclusions of the case, highlighting overarching economic issues
2
Final mark for Assessment Item Part A
____/40
Additional Comments: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Markers Signature _________________________________Date______________________________________
Due 1/23
Chapter 7: Problem 3, on page 162.
•Chapter 8: Problem 4, a and b, on pages 179–180.
•Chapter 9: Problem 2 on page 193.
3. You are a newspaper publisher. You are in the middle of a one year rental contract for your factory that requires you to pay 500,000 per month, and you have contractual labor obligations of 1 million per month that you cannot get out of. You also have a marginal printing cost of 0.25 per paper as well as a marginal delivery cost of 0.10 per paper. If sales fall by 20 percent from 1 million papers per month to 800,000 papers per month, what happens to the AFC per paper, the MC per paper, and the minimum amount that you must charge to break even on these costs?
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4.Assume that the cost data in the top table of the next column are for a purely competitive producer.
a. At a price of $56, will this firm produce in the long run? If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? What economic profit or loss will the firm realize per unit of output?
b. Answer the questions of 4a assuming the product price is $41.
Total product Average F cost Average V cost Average T cost M Cost
0 $45
1 $60.00 $45.00 $105.00
40
2 30.00 42.50 72.50
35
3 20.00 40.00 60.00
30
4 15.00 37.50 52.50
35
5 12.00 37.00 49.00
40
6 10.00 37.50 47.50
45
7 8.57 38.57 47.14
55
8 7.50 40.63 48.13
65
9 6.67 43.33 50.00
75
10 6.00 46.50 52.50
2. A firm in a purely competitive industry is currently producing 1000 units per day at a total cost of $450. If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275. What are the firms ATC per unit at these three levels of production? If every firm in this industry has the same cost structure, is the industry in long-run competitive equilibrium? From what you know about these firms’ cost structures, what is the highest possible price per unit that could exist as the market price in the long-run equilibrium? If that price ends up being the market price and if the normal rate of profit is 10%, then how big will each firms accounting profit per unit be?
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Around one page
Do an Internet search for the Web site of the corporation of your choice and find that corporation’s annual report to stockholders on the Web site.
•Does the company have characteristics of a perfect competition, monopoly, or oligopoly?
•How does competition in this industry help or hurt consumers?
•What does the annual report say about the corporation’s view of future business challenges and the market in which it operates?
•Does this corporation see long-run adjustments as described in this week’s textbook chapter readings?
•Consider both the microeconomic and macroeconomic views. Do you agree with the corporation’s view? Why or why not?
Due 2/2
After reading the case study The Coffee Crisis, write a 4–5 page analysis of the case. Address the following components in your paper, using the course concepts, theories, and resources as examples and evidence to support your analysis. Remember to follow APA format for all citations and references.
•Analyze the economic implications of operating in different market and industry structures.
•Analyze the following factors that have affected the coffee industry over time:
◾Explain the effects of supply and demand generally and specifically related to the coffee industry.
◾Analyze how new countries entering the market affect the coffee industry.
◾Analyze how new products and marketing strategies entering the market affect the coffee industry.
◾Explain consumer behavior and its implications for business decisions, related to the coffee industry.
Due 1/30
Around 1 page
Review “Last Word: Are Chief Executive Officers (CEOs) Overpaid?” on page 283 of your textbook. Discuss your thoughts on whether CEOs’ exceptionally high pay is economically justified. Explain your rationale.
Around one page
Is Microsoft a monopoly? Why or why not? If it is not now, was it ever? If it is, should it be broken up? Defend your position using the course texts, following proper APA format.
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