Reference no: EM133204200 , Length: 2 Pages

Assignment:

Q1. Contributions to charitable organizations are deductible under the federal income tax. In what way does this government policy encourage private solutions to externalities?

Q2. Please read the Wall Street Journal article "Oil Price Likely to Stay Buoyed by Marginal Costs" published in 2012. This article predicted that the oil price would not drop far below $100 per barrel because the market price was already equal to the marginal cost of pumping oil. Using what you have learned in the class, discuss under what market condition, this argument is valid. As we know, recently the oil price dropped to $43 per barrel and the prediction is wrong. Therefore, the oil price should be higher than the marginal cost in 2012. Under what market condition, this condition could be true?

Q3. With the big data technology, it becomes much easier to the retailers to practice price discrimination. Please read the Washington Post article "If you use a Mac or an Android, e-commerce sites may be charging you more" published in 2014.

1) Please summarize this article by your own words;

2) Any idea to explain why the operation system you use matters? What strategy that we have learned in class do they use?

3) If the government want to protect the benefits of the customers, meaning allow them to take more surplus, what is your suggestions? (This is an open question)