1. Why Natural Resources Are a Curse?

2. Why in most natural resource industries, economic rent is positive, even with free entry.

3. Why the private provision of public good is inefficient? Can the public provision of public good be efficient?

Research Walmart and give an example of how the company is following a Cost Leadership strategy Describe what Walmart is doing to implement this form of competitive advantage. Be specific in explain which benefits the company has eliminated to reduce costs.

Suppose growth in government spending in an economy permanently rises. Using the
AD-AS model, explain the effects of the permanent increase in government
spending growth on the inflation rate and the real growth rate in both the short run and the long
run.

"Costs and Profit Maximization Under Competition", tells us that in deciding what quantity to produce, a firm should look at all its costs. We are reminded the "Total Cost" includes Opportunity Costs, not just money costs. Discuss the major costs that a business faces, being sure to distinguish between "Explicit Costs", and "Implicit Costs", using an example from a real or fictitious operating business.

Suppose there exist 2 countries, Home and Foreign; 2 goods, X and Y; and 2 factors of production, labor (L) and capital (K). Each country can produce both goods. X is labor-intensive and Y is capital-intensive. Home is labor-abundant and Foreign is capital-abundant. Assume that the standard assumptions of the Heckscher-Ohlin model hold. When answering the following question, please support each of your arguments with detailed analysis and draw the relevant diagrams to support your answer.

Consider a move from autarky to free trade between the two countries in both goods. Identify which group of people (laborers or owners of capital) gain and which lose in Home from the move from autarky to free trade. Discuss clearly how the assumptions of the model lead to this result.

Analyze the Fed’s reaction to the Sept. 11 terrorist attacks.

1. (25pts) A person’s demand for gizmos is given by the following equation:q = 24 - 2p + 0.0008I

where, q is the quantity demanded at price p when the person’s income is I. Assume initially that theperson’s income is $160,000.

a.At what price will demand fall to zero? (This is sometimes called the choke price because it is the price that chokes off demand.)

b.If the market price for gizmos is $40, how many will be demanded?

c.At a price of $40, what is the price elasticity of demand for gizmos?

d.At a price of $40, what is the consumer surplus?

e.If price rises to $48, how much consumer surplus is lost?

f.If the price drops to $30, how much consumer surplus is gained?

g.If income were $200,000, what would be the consumer surplus loss from a price rise from $40

to $48? Why is it different than the change in CS surplus obtained in 1.e.?

Suppose a country has a floating exchange rate for its currency and begins in long-run equilibrium. Consider the effect of a temporary rise in real money demand. Use a DD-AA-XX diagram to answer the following (you do not need to show the diagram, but you do need to write in words what happens on it).

(a) Indicate any movement(s) of the curves on your diagram that can be observed as a result of the temporary rise in real money demand. What happens to national income, Y, and the exchange rate, E, as a result? What happens to the current account, and how do you know that?

(b) What should the country do regarding fiscal policy to achieve full-employment national income again in the short run? Indicate any movement(s) of the curves on your diagram that can be observed as a result of the country implementing this fiscal policy. How do the equilibrium exchange rate, E, and national income, Y, levels after implementing this policy compare to their ending equilibrium positions in part (a), and how do they compare to their initial positions prior to the rise in real money demand?

(c) What should the country do regarding fiscal policy to achieve the current account level it started with (the current account level the country had prior to the rise in real money demand)? Indicate any movement(s) of the curves on your diagram that can be observed as a result of the country implementing this fiscal policy. How do the equilibrium exchange rate, E, and national income, Y, levels after implementing this policy compare to their ending equilibrium positions in part (a), and how do they compare to their initial positions prior to the rise in real money demand?

   Identify the goals and describe the structure of the Federal Reserve System.

Are states still the most important actors in international Relations? Why or Why not?

The United States instituted tariffs (increase in price of Chinese goods imported into the US) on China selectively on 7/6/18 of 10% on ultimately $50billion of goods.

China retaliated in kind by imposing tariffs (increase in the price of US goods imported into China) on US on the same day by the same amount

On 5/15/19, The US increased the amount of the tariff to 25% and expanded the list of Chinese goods covered by the tariff.

Chinese responded in kind by the amount of the tariff and the list of goods covered.  

Using the production possibilities model, and making the assumptions that the US and China are the only countries in the world, and making the assumption of constant costs in production, and assume also that the 2 countries produce only 2 goods: Soybeans and Consumer goods, with the US having a comparative advantage in Soybeans, China having a comparative advantage in Consumer Goods, explain what you would expect to happen once these tariffs are imposed.  

Please include in your discussion, what effect, if any, these tariffs (trade war) would have on the costs of production, level of production, level of consumption in each country.

Finally, relax the assumption about US and China being the only two countries in the world. If other countries are allowed to trade with either China or the US, what would happen to the level of production and price of each good? Be sure to note all the assumptions you are making in your analysis. Your answers need not be lengthy, if you would like to include graphs that is ok.

The Federal Reserve is responsible for managing the country’s money supply. Monetary policy affects the whole economy through interest rates. When the Fed increases the money supply, interest rates drop. When the Fed decreases the money supply, interest rates increase. This week you will discuss how you are affected by the Federal Reserve’s monetary policies. In your discussion, please consider the following questions or statements. Think about a recent purchase you made that required a loan, like a house, or a new car. Explain how you arrived at the decision to purchase. Then explain how the interest rate on the loan affected your purchase. For instance, were you able to purchase a higher priced item because the interest rate was low? Thinking deeper about your answers; how do interest rates affect millions of other buyers and their decisions, then how that affects the whole economy? Explain.

Is it possible that PE > GDP in a given year in a closed economy if some aggregate expenditure falls on output produced in the previous year? Please explain in detail with different possibilities.

With Donald Trump as the current President of the U.S., are we likely to become more of a command economy? Justify the stand you take.