Economics 370 Microeconomic Theory Problem Set 6 Answer Key 1) Describe the effects on output and welfare if the government regulates a monopoly so that it may not charge a price above p‚ which lies between the unregulated monopoly price and the optimally regulate price (determined by the intersection of the firm’s marginal cost and the market demand curve). As usual‚ the monopoly determines its optimal output on the basis of MR = MC. Here‚ however‚ it cannot charge a price in excess of p*. So
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Automobile Industry Hailed as ‘the industry of industries’ by Peter Drucker‚ the founding father of the study of management‚ in 1946‚ the automobile industry had evolved continuously with changing times from craft production in 1890s to mass production in 1910s to lean production techniques in the 1970s. The Asian countries‚ mainly by Japan‚ China and India‚ registered a 9% increase in production over last year‚ constituting 35.9% of the global production. In fact China and India posted positive
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Market Failure Market failure can be defined as give full play to the market mechanism but still cannot achieve social welfare maximization. Market failure was caused by the free market fails to allocated resources in an optimum and efficient manner. Type of market failure can be divided into three types; there are externalities‚ public goods and non-competitive behavior. Externalities is part of the interests of people’s economic behavior cannot be classified for their own enjoyment of‚ or part
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Contemporary Economic Analysis: Written Assignment The Impact of a Reduction in Sunday Penalty Rates for Casual Employees on the Price Mechanism The Australian Financial Review recently published an article titled “Sunday penalty rate to be cut to 50pc” (Dunckley 2014). In summary: A Fair Work Commission ruling has reduced the 75% penalty pay rates for casual employees in Australia who work on Sundays to 50%. Penalty rates
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by the American Prospect‚ argues that college education should be affordable and accessible to all students. The author concludes that since America is considered the wealthiest in the history of the world; therefore‚ the country owns the ability to support the expenses for all seeking college students‚ and that college will be some affordable options to all American Families. This argument may take many paths; however‚ I personally think that affordable college education can be a great way to support
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Macroeconomics‚ 12e (Gordon) Chapter 2 The Measurement of Income‚ Prices‚ and Unemployment 2.1 Why We Care About Income 1) Job openings are plentiful when the A) actual real GDP is above the natural real GDP. B) natural real GDP is above the actual real GDP. C) natural real GDP is increasing rapidly. D) None of the above. Question Status: Previous Edition 2) The real income per capita is a measure of the A) well-being of every individual in the nation. B) well-being of the average individual
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The production possibilities (PP) curve is a graphical medium of highlighting the central problem of ’what to produce’. To decide what to produce and in what quantities‚ it is first necessary to know what is obtainable. The PP curve shows the options that are obtainable‚ or simply the production possibilities. What is obtainable is based on the following assumptions: 1. The resources available are fixed. 2. The technology remains unchanged. 3. The resources are fully employed. 4. The resources
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When one chooses to go to college‚ they are investing in their future career‚ but is college really worth the price? Once a young adult leaves high school‚ one has a choice to either go to college or to go into the workforce. When one is deciding which path they will take‚ they must look at both the benefits and disadvantages. The advantage to going straight into the workforce is being able to immediately start their profession of choice and do not have to pay college loans throughout their entire
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Colleges are too expensive Many families and students incur enormous debt to jump through the increasing required college “hoop”. Today colleges are too expensive to attend for most students. Over 60 colleges and universities in the country charge over 50‚000 dollars a year for tuition. With a family of 3 like mine there would be no way for my family to send us all to colleges. Yes colleges had state budget cuts. Which prompted many public colleges to raise tuition and the need to improve their
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2nd part: Microeconomic Analysis Under the Pure Competition Assumption Chap 3-The Theory of Consumer Choice (stiglitz chap 5) Section 1) Preferences: What the Consumer Wants A/ The consumer preferences * Utility= the level of happiness or satisfaction that a person receives from the consumption of goods and services. Utility is a measure of well-being * Focus on 2 goods X and Y * Cardinal/Ordinal measurements related economics problem. cardinal: a variable is cardinally measurable
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