Reference no: EM131379964
1. Assume your marginal rate of substitution between goods 1 and 2 is −1. If your consumption choice is optimal,
(a) the price of good 1 must exceed the price of good 2.
(b) the price of good 2 must exceed the price of good 1.
(c) the prices of the two must be equal.
(d) There is not enough information to determine.
2. A generic good is taxed. Who bears more of the burden of the tax, producers or consumers? (a) It depends on whether supply or demand is more elastic.
(b) Producers.
(c) Consumers.
(d) Producers and consumers split the tax evenly.
(e) None of the above.
3. Use a basic supply and demand framework to predict what will happen if the government imposes a binding price ceiling.
(a) A shortage/deficit would occur.
(b) All consumers will be made better off.
(c) All producers will be made better off.
(d) Poor people will be made better off.
4. The Ruritanian Pencil Company (RPC) has the monopoly on pencil production in Ruritania. The inverse demand for pencils P = 60 − Q and the marginal revenue from the sale of pencils is MR = 60 − 2Q, where Q is the quantity of pencils. The firm’s total costs are T C = 20 + Q2 , and its marginal cost is MC = 2Q. What are the RPC’s profit-maximizing quantity and price? What profits does it make
(a) 15, 45, 430
(b) 1, 40, 19
(c) 20, 40, 380
(d) 10, 50, 380
(e) None of the above.
|
What prices will monopolist set when it can discriminate
: Suppose there is a movie monopolist selling to students, adults, and seniors. The marginal cost of tickets is fixed at $7.00. What prices will a monopolist set when it can discriminate? How much profit will the firm make? Suppose the firm would rathe..
|
|
Resulting tangency condition under this price paradigm
: Suppose Danielle consumes pancakes and waffles. Her utility function can be expressed as U(P,W)=10P^.75 W^.5. Furthermore, suppose the price of pancakes is $4.00 and the price of waffles is $2.50. Define Danielle’s marginal rate of substitution for P..
|
|
About in class are the technical rate of substitution
: Two of the most important concepts we’ve talked about in class are the technical rate of substitution between two inputs and the ratio of the price of those inputs. Explain, briefly, what each of these concepts represent in terms of tradeoffs, and wh..
|
|
About the size of the current federal debt
: In thinking about the size of the current federal debt and deficit relative to the current level of GDP, explain how you think this information affects peoples' decisions
|
|
Use basic supply and demand framework to predict
: Assume your marginal rate of substitution between goods 1 and 2 is −1. If your consumption choice is optimal, A generic good is taxed. Who bears more of the burden of the tax, producers or consumers? (a) It depends on whether supply or demand is more..
|
|
Explain price and output determinations for firms
: Describe and explain price and output determinations for firms. How does the change from the short run to the long run for a Monopolistic Competitor? What effect does product differentiation have on the firms approach to price and advertising?
|
|
The wrong side of globalization
: "The Wrong Side of Globalization" by the Nobel Prize winning economist, Joseph Stiglitz - originally from Gary, Indiana. How does he characterize trade agreements?
|
|
Deviations from efficiency
: Monopoly/Monopsony: Why is MR pS for a monopsonist, and why does it matter? Game Theory: What is the Nash equilibrium for some simple game?
|
|
Consumer problems
: Representing Budgets and Preferences: How do you translate from a description to budgets/indifference curves. Optimal Choice: At the optimal bundle what relation does the indifference curve have to the budget line?
|