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In 2009, the hershey company of pennsylvania became the latest company to open a candy factory in mexico, joining other american candy companies including brach's confections and ferrara pan candy, which had opened plans there earlier. The reason for hershey's move was more than just lower wages. It was also because of lower sugar prices. Sugar prices in the united states have for many decades been supported in order to protect the american sugar industry and the thousands of farmers it employees. Using the tools of consumer and producer surplus, explain how the events described may have resulted from price supports for sugar.
A prolific artist, Pablo Picasso (1881-1973) painted 1,000 paintings during what is known as his “Blue Period”, and all thousand paintings are on display and hanging in galleries throughout the world. Draw the supply curve for Picasso’s Blue period w..
Suppose we repeat an experiment identically and independently 100 times. Each time we construct a 99% confidence interval for µ via the t-distribution.
Suppose that there are 150 houses in the community with 2,000 square feet (providing services that rent for $10,000 per year). The interest rate is 4% and with proper maintenance all of the houses will last forever. In an election the population deci..
Explain why, when the price of good changes, the price elasticity of demand is likely to be higher or lower as a longer period of time elapses. Consider as an example the OPEC oil price increases in the 1970s.
What is a time consistency problem, in general. What is the time inconsistency problem with inflation policy? What is the Fed’s Loss function?
Find a 90% confidence interval to estimate the difference in the percent of students who pass using the two methods.
Consider a market for surrogate mothers in the City of Shangeles. 100 people are willing to surrogate for free in a given time period, but others require payment. Supply is given by P_s = 0 for Q lessthanorequalto 100 and P_s = -100 + Q when Q > 100...
Illustrate what does such a combination mean to this economy. Explain in detail being sure to discuss such a combination relative to resource utilization and efficiency.
What kind of unemployment do many commentators propose is dominant following the Great Recesison? Explain what’s going on here.
Consider a monopolist facing two customer groups. The first has demand p1 = 10 ! q1/2 and the second has demand p2 = 20 ! q2. The firm has marginal cost MC(q) = q, where q = q1 + q2 is the total amount sold. Suppose it can separate customers into the..
Why is bidding your valuation weakly dominant strategy in the standard independent private values auction model? Explain all possible cases
Declining Industry: Consider two competing firms in a declining industry that cannot support both firms profitably.
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