Briefly explain why monopolists are neither productively nor allocatively efficient and briefly describe what results from these circumstances.

Write a paper on the coronavirus effects on US: GDP, economic growth, employment, inflation, consumption, investment. What policy can help: fiscal or Monetary or both?

Notes: At least 5 pages, with data and graphs. It is mandatory to do the paper.

Up to 10 points added to final grade.  

1. Imagine that the Canadian economy in 2016 could be described by the following demand determined model:

Consumption: C = a + bYd + θW

Investment: I = I0

Government Purchases: G = G0

Exports: X = X0

Imports: IM = mY

Tax Revenue: T = τ + tY
Where: a is autonomous consumption, b is the marginal propensity to consume out of disposable income, W is wealth, θ is the marginal propensity to consume out of wealth, m is the marginal propensity to import, τ are lump-sum taxes, and t is the tax rate.

(a) Algebraically solve for the equilibrium level of national income, the simple multiplier & draw a diagram of the equilibrium. Make sure to show all your steps, and label all important points on your graph. Total of 7 Marks (5 marks for algebra, 2 marks for graph)

(b) The real value of Canadian households’ principal residence increased three-fold from 1999-2016 and represented about 36% of household assets. Discuss (using the aid of a diagram) what would happen if housing prices fell in this economy. Total of 7 Marks (4 marks for explanation, 3 marks for graph)

For parts (c) and (d), imagine the Canadian economy is characterized by the following parameter values:
Consumption: C = 200 + .75Yd + 0.05W

Investment: I = 350

Government Purchases: G = 75

Exports: X = 125

Imports: IM = 0.2Y

Tax Revenue: T = 100 + 0.1Y

Wealth: W = 1000

The government wants to decrease equilibrium national income by $10 billion using taxation. This model allows two possible tax policies: i. Changes to lump-sum taxes (τ) ii. Changes to the tax-rate (t)

(c) If the government wanted to decrease national equilibrium by $10billion solely through changes to lump-sum taxes(τ), how should they alter their lump-sum taxes? Assume no other changes would take place. Complete answers should include both your calculations and a diagram illustrating what is happening. Total of 7 Marks (2 marks for graph, 5 marks for algebra/explanation)

(d) If the government wanted to decrease national equilibrium by $10billion solely through changes to the proportional tax rate(t), how should they alter their tax rate? Assume no other changes would take place. Complete answers should include both your calculations and a diagram illustrating what is happening. Total of 7 Marks (2 marks for graph, 5 marks for algebra/explanation)

1. What does your own labor supply curve look like? As the rate of your wages changes, what factors affect your willingness to work? What is a backward bending supply curve of labor? Do you think that it probably does exist in the real world? If so, why?

Using the Rybczynski Theorem,

1. If you were a Capital owner, would you support foreign direct investment coming into your country? Why or why not?

2. If you were a worker, would you support immigration policies that increase the number of workers in your country?

According to the Stolper-Samuelson theorem, would you expect capital owners across the globe to favor tariffs given that due to technological advances, production of most goods the world over are capital intensive? Why or why not?

A rm has the following production function:y = L^1/3K^1/2

(a) Does this production function exhibit increasing, decreasing, or constant returns to scale? Prove.

(b) Suppose in the short run, capital is xed at K = 100. Assuming that the output and factor prices are p, w; and r respectively, find firm's factor demand for labor. What will the effects be when w, r and p increase? Explain your results intuitively.

(c) Now, suppose the government decides to impose a payroll tax of $t per worker employed. What will the effect be on L*? Why?

(d) Alternatively, if the government decides to impose a lum-sum tax of $T, what will the e¤ect be on L*? Why?

50) In pricing her line of Smart Phone Cases, Lucie Loo remembers hearing that she needs to consider three decisions with respect to pricing her product line. She seems to remember that one decision is to identify the lowest-priced product and set the price to drive traffic. Another decision she needs to make is to identify the highest priced product and position it as her premium offering. What is the third decision Lucie needs to make?

estimate the total Economic Value (EV) for the complete product line to ensure she makes a profit

set the price differentials for all other products in the line to reflect their perceived value

ensure that the cross elasticity of demand between the products is positive

set the prices for the rest of the line to minimize product cannibalization

determine the break-even quantity for each item so that she knows how much inventory to have on hand for each item

A company's management is considering to buying a new machine. A new machine will cost $25,000. Annual operating and maintenance costs will be $8,000 in the first year, increasing by $400 each year. Assume the machine depreciates by $4,000 per year according to straight-line depreciation. Assume the machine can be re-sold at its book value at any time.

a) Owning the proposed new machine for how many years will result in the minimum EAC if the interest rate is 8%? (show steps)

b) If the old machine reached its minimum EAC several years ago and its operating and maintenance cost this year are expected to be $9,000, should the arena’s management buy the new machine? Assume the operating and maintenance costs of the old machine will increase, and assume it has a salvage value of zero.

Develop and discuss with examples of the personal computer industry of apple/mac and windows  where appropriate the various aspects that make up Michael Porter's structural analysis of an oligopoly for personal computer industry of apple/mac and windows industry.

The demand for Greta’s Grinders can be characterized by the following point elasticities: price elasticity = -0.8, cross-price elasticity with Melvin’s Mashers = -2, and income elasticity = 1.2. Which of the following statements is false?

1. A price increase for Greta Grinders will decrease both the number of units demanded and the total revenue Gail gets.
2. The cross-price elasticity indicates that a 4% increase in the price of Melvin’s Mashers will cause an 8% increase in quantity demanded of Greta Grinders.
3. An 8% price reduction for Greta Grinders would be necessary to overcome the effects of a 4% decline in income.
4. All the above statements are false.  

Suppose market demand and supply are given by Q_d= 400-12P and Q_s= -20 + 8P. If a price floor of $20.00 is imposed,

1. there will be a surplus of 10 units.
2. there will be neither a surplus or shortage.
3. there will be a shortage of 16 units.  
4. None of the above choices makes any sense in this case.