Determine the conditions of perfect competition

Assignment Help Macroeconomics

Reference no: EM1368873

1. What determines price in a free market?

2. Determine the conditions of perfect competition. Name each and explain with an example how the real markets can violate one of more of these conditions. Finally, and this is important, why would a firm want to violate them.

3. What is the relationship between inflation and unemployment. Be sure to state, in numerical, percentage value, the natural rate of unemployment. Explain as well the danger we face if the unemployment rate drops below that natural rate.

Natural Rate of Unemployment: _____ %

4. At what point does a profit maximizing firm produce?
5. At what point does a profit maximizing firm shut down?
6. Why would a profit maximizing firm continue producing when it is not making a profit (but is meeting its variable costs?
7. Define Gross Domestic Product (GDP) its components. What was the approximate size of the US GDP last year.

Size of US GDP: $______________________

8. What are opportunity costs, and how do they help a firm decide which of its many products to produce to maximize profit.?

9. Define inflation and explain why is it harmful?

10. How do the laws of supply and demand determine that a basketball player can earn $2.2 million, but a teacher earns only $52,000.00? Is this outcome fair?

11 & 12
When explaining the solutions to the following two questions, be sure to use the economic terminology below: (substitute details from the question into the parenthetical and bracketed verbiage.
The (change, i.e., whatever has happened in the hypothetical) has caused the [Demand or Supply] curve to shift [left or right] causing movement along the [supply or demand, i.e., the other curve] curve to a new, [higher or lower] equilibrium point.

11. As a result of a hurricanes Katrina and Rita, thousands of Cajun evacuees immigrate to Little Rock. What will happen to the price of the average dinner at a Cajun restaurant ceteris paribus?

12. A series of hurricanes destroys the tomato harvest throughout the South. What will happen in the tomato market as a result of the bad tomato harvest ceteris paribus?

Reference no: EM1368873

Questions Cloud

Explain which ethical guideline is most applicable : Explain Which ethical guideline from the articles is most applicable to you and why and How can the ethical issues raised

Determining nominal gdp : The table given below gives the production and values for a small economy that produces only bread and pop. The base year is 2002.

Explain what specific communication techniques : Explain What specific communication techniques from the text should this group begin to incorporate into their activities

Write program to establish two savings accounts : Write program which establishes two savings accounts with saver1 having account number 10002 with initial balance of $2,000, and saver2 having account 10003 with initial balance of $3,000.

Determine the conditions of perfect competition : Determine the conditions of perfect competition. Name each and describe with an example how the real markets can violate one of more of these conditions.

Information system to use for stocks and trading futures : Write down some of the many considerations in selecting right information system to use for trading futures and stocks?

Explain which statistical analysis appropriate : Explain and distinguish which statistical analysis you would conduct and which appropriate test or test statistic should be used.

How far away is the milky way from our nearest neighbour : How far away is the Milky Way from our nearest neighbour, Andromeda Galaxy, if Andromeda contains roughly the similar number of stars and attracts the Milky Way with a gravitational force of 2.4 x 10^30 N.

Minimizing unemployment rate : Discuss should the government minimize unemployment rate? What will happen if the unemployment rate is too low?

User Account

All Pages