Conducting monetary policy by the rule or by the discretion has pros and cons. What are pros and cons of conducting monetary policy via rules and discretions?

Most, if not all, of the Canadians believe the government should provide an “adequate” level of public school funding. How might raising this level of “adequacy” actually lead to a reduction of overall (public and private) levels of educational spending in Canada? Explain with the help of a properly labeled diagram.

The pornography industry is one of the most lucrative in the nation— some estimates are that it grosses more than $4 billion annually—however the women and girls who work in this industry see very little of that money. Prostitution as well is highly profitable for a growing number of pimps and human traffickers selling both women and children. What are the legal and moral differences between these two types of sex work, and how have changing social norms contributed to the legal status of both today?

SIU is a university in the UK catering for international students. There are currently 950 students. Fees were £16,000 for the last year and the president is concerned that adverse changes in the economic and educational environment are threatening the university’s future. The income of the market is expected to decline next year by 2%, and it is also expected that the average fee of competitive institutions will fall from £14,000 to £12,000. 10% of revenue is currently spent on promotion. The president does some research and estimates that the relevant demand elasticities are as follows:

PED = -1.6, YED = 2.2, AED = 1.8, CED = 0.8.

1. If fees are maintained at their current level, estimate the amount that would need to be spent on promotion to achieve the target.

How can the neoclassical growth model explain the economy in Mexico?

As newly elected President of your school’s Economics Club, you have been put in charge of the Club’s annual budget of $5000. This budget is to be used to produce “services” for the Club’s members (everyone taking this Economics class). In the past, such services have included things like 1) guest speakers coming into class (who charge a fee for speaking); 2) tours of local businesses (transportation costs); 3) downloading economic statistics from the internet (connect time charges); 4) an end-of-semester party (all expenses paid from the budget); and of course, 5) the President’s salary. What issues do you need to consider as you decide how to allocate the $5000, while keeping in mind that any one of the items (especially item 5) might completely drain your budget? HINT: Write your answer by referencing the central coordination problems faced by any economic system.

What is shown by the budget line in a two-product (A and B) case? Describe what happens when there is a change in income or the price of a product.

Explain what is meant by a command economy. List nine characteristics of the market system.

Once unions are organized according to the terms of the NLRA, the union and the employer try to negotiate a collective bargaining agreement to cover all the terms and conditions of employment for employees in the union. The textbook describes "terms and conditions," but the two biggest items are wages and benefits.

As part of this negotiation process, employers and the union must negotiate in good faith. Take a look at the NLRB v. Whitesell Corp. case. Here the employer tried to negotiate to an impasse, then unilaterally impose their conditions on the employees.

How much further do you think the employer should have negotiated before reaching impasse?

Example- I think that the employer should have continued to negotiate until there was truly a deadlock on all outstanding issues. If there had truly been an impasse reached both sides would have held their ground on one or more issues and were unwilling to budge. At that point an impasse in negotiations could have been declared.

Based on the U.S. Constitution, what do you think the proper role of government is in health care and why?

Hurricanes hit the income of people. At the same time, it also destroys the supplies of essential commodities causing sharp increases in prices of essential commodities. The local regulator suggests a price control on essential commodities. Do you agree or disagree? Briefly explain.

How can the market structure model be improved?

(for example for the monopoly industry and so on)

You run a company, GizmoNet, that produces gizmos. Gizmos hook onto iPhones, allowing users to access the internet via a virtual reality interface.

Your company hires software engineers, who are employed for three periods. In period one, they must train at GizmoNet. In this period their total productivity is $10 million, and training costs are $8 million. In periods two and three (after the training) productivity is $17 million and $19 million, respectively. An engineer who received no training would have productivity of $10 million at any other firm in all three periods.

Engineers can quit after training (and always get a job offer at other firms). If they do so, their productivity at other firms is $2 million lower than at GizmoNet in each of the last two periods. Assume no discounting.

b. (10 points) Suppose that the labor market is competitive, so that the firm

must earn zero profit from hiring an engineer. If so, what set of salaries

? , ? , ? must the firm offer to guarantee that the total return on the123

training investment is maximized? To choose an answer if you have more than one possibility, pick the feasible solution that maximizes ? (because

software engineers are impatient and risk averse, so ceteris paribus they prefer to be paid as soon as possible).
Hint: first figure out what has to happen to maximize the return on investment. The figure out any constraints on pay, etc. Only then figure out who should invest and get the return (worker or firm), and to what extent.

c. (5 points) In an economic sense (rather than accounting), who pays for the training investment, and who earns the return on the investment? Briefly explain.

SIU is a university in the UK catering for international students. There are currently 950 students. Fees were £16,000 for the last year and the president is concerned that adverse changes in the economic and educational environment are threatening the university’s future. The income of the market is expected to decline next year by 2%, and it is also expected that the average fee of competitive institutions will fall from £14,000 to £12,000. 10% of revenue is currently spent on promotion. The president does some research and estimates that the relevant demand elasticities are as follows:

PED = -1.6, YED = 2.2, AED = 1.8, CED = 0.8.

1. Briefly outline other marketing mix options for achieving the target (50 words).

1. Suppose that the total aggregate supply of workers is inelastic (constant), with the aggregate supply curve (all sectors combined) given by L^S=100 workers. Suppose there are two industries/sectors with labour demand L_A=120-w_A in sector A and labour demand L_B=100-w_B in sector B.

• Find the aggregate labour demand function L^D(w) of both industries/sectors combined, assuming they pay the same wage w_A=w_B=w
• Calculate the aggregate competitive equilibrium outcome (wage and employment level) when both industries/sectors pay the same wage w_A=w_B=w
• At the equilibrium wage, how many workers will work in sector A and how many workers will work in sector B?
• Draw the demand function in each sector (on two graphs). Label the equilibrium wage and number of workers in each sector.

2. Now (for the same setup as Problem 1) suppose sector A forms a union and bargains for wage w_A=30.

• What is the quantity of labour demanded in sector A after the wage increase?
• How many workers from sector A will now have to look for employment in sector B?
• How many workers will be in sector B after these workers join? What wage will be paid in sector B now?
• For sectors A and B, compare the wage and employment level outcomes versus in Problem 1.
• What is the observed union—non-union wage differential d̂_obs?
• What is the pure (direct) union—non-union wage differential d̂_dir (caused by the union directly)?
• Which differential is greater, and why?

Edit: That's exactly what our prof gave us I'm confused as well :(