POSITIVE VS. NORMATIVE ECONOMICS Instructions: Determine whether each of the following statements is representative of Positive or Normative Economics. Place a “P” on the lines next to all positive statements; place an “N” on the lines next to normative statements.

1. _____ The minimum wage should be raised to $15.00 an hour.

2. _____ If the minimum wage is increased, more people will become unemployed.

3. _____ There is too much crime in the U.S., something should be done about it.

4. _____ If more police are put on the streets, crime rates will fall.

5. _____ In a market, when supply exceeds demand, price tends to fall.

6. _____ When determining tax rates, the government should take into account the income needs of individuals.

7. _____ If the government reduces income taxes, consumption will most likely increase.

8. _____ Inflation is too high in the United States.

9. _____ U.S. trade restrictions cost consumers $19 billion annually in higher prices.

10. _____ NAFTA is likely to make the people of Mexico better off.

11. _____ Increasing the cost of university housing will lead to more people having roommates or seeking off-campus housing.

12. _____ Increasing the cost of university housing is unfair because it places a heavier burden on low income individuals.

13. _____ The government should provide health care to all of its citizens.

14. _____ Prices increased by 1% last year.

15. _____ No family ought to pay more than 25% of its income in taxes.

1. Provide one argument in favor of and one against the idea that the Fed was responsible for the housing price bubble of the mid-2000s.

2. What role did the shadow banking system play in the 2007–2009 financial crisis?

Q1. Clearly distinguish between economics and managerial economics Q2. Define the concept of opportunity cost. What are its applications in decision making? Q3. (a) Discuss the types of risks faced by a business firm (b) Explain the ways of managing risk in an organization

For each scenario, assess whether an externality is present.

a. Vaccinating children against influenza reduces its incidence among elderly.

b. Newly graduated nurses flock to reaching hospitals for training. After working for a year, many leave work for competitors.

c. A couple who planned to move to Florida to retire find that the plummeting house market has wiped out equity.

d. Physicians complain that they spend a third of their time explaining to patients why television advertisement about medications for their conditions do not apply to them. ( NO PLAGIARISM PLEASE , 80 WORDS ESSAY FOR A, B, C, AND D PLEASE )

In simple terms, how does one write out the Phillips curve equation? What figures/information is required?

Consider a monopoly firm facing a demand curve Q = 100 – P. This firm has fixed costs =$1000 and constant marginal cost =$20. Total costs are $1000 + $20Q and average costs are $1000/Q + $20.

a. What is the firm’s profit maximizing level of output? What price does it charge to sell this amount of output? How much profit does it make? What is consumer surplus at this level of output? Show your work.(8)

b. Suppose this firm was regulated by the government, and that the regulation required that the firm charge a price equal to marginal cost. Calculate the number of units demanded and profit at this level of output. Is this policy sustainable? Why or why not?(7)

c. As an alternative, consider a regulation that is meant to allow the firm to earn a “reasonable rate of return” for operating. After analyzing the firm’s costs, the regulator allows the firm to charge $36 per unit produced. Calculate quantity demanded and profit under this policy. Is this a sustainable price? Why or why not?(7)

Define for each scenario whether AD (Aggregate Demand) or AS (Aggregate Supply) will shift, and indicate if it will be an outward shift (rightward) or inward shift (leftward).

a. A fall in the price of oil

b. A rise in consumer optimism

c. A hurricane destroys factories in South Carolina

d. Foreigners watch fewer U.S.-made movies

e. New inventions occur at a faster pace

f. A faster money growth

QUESTION 1

If an economy has perfect income equality, explicitly describe what that economy's Lorenz Curve would look like.

QUESTION 2

Briefly describe a situation where you believe two workers should have perfect income equality. Briefly describe a situation where you believe it's okay for two workers to experience income inequality.  

QUESTION 3

An economy's Lorenz Curve reveals that an economy's highest income quintile has 65% of the economy's income while the lowest income quintile only has 5% of the economy's income. Solely based on the Lorenz Curve, is this distribution of income fair? Why or why not?

QUESTION 4

To combat income inequality and to generate increased tax revenues to fund expenditures, government officials decide to aggressively increase how progressive income taxes are, so much so that the top income earners are marginally taxed 90% of their income (and while this marginal tax rate may seem oppressive, these top income earners still have more than enough income to satisfy all of their needs and all but the most extravagant of wants - basically, these earners have more than enough money).

Argue why this tax policy is a fair approach to fund government expenditures.

Why might this tax policy fail to achieve its objectives (tax revenues would actually decline as a result)?

Please discuss a contract you are a party to - indicating what party you are and what type of contract it is using vocabulary from this chapter.

Subject BUS 201 Business Law

1. Given that the interest rate can be determined by the equilibrium of the demand and supply of money, the central bank could raise or lower the interest rate indirectly by increasing or decreasing the money supply. Does the Bank of Canada take this approach? Why or why not?
2. In March 2020, the Bank of Canada decided to lower the overnight interest rate from 75% to 0.25%.
   1. While the bank has a target for the overnight rate, the rate itself is market-determined. What is the bank rate and how does the Bank of Canada use it to influence the overnight rate?
   2. Briefly explain how a decrease in the overnight interest rates eventually results in a change in the money supply. Is the Bank of Canada active or passive in the money supply change?

why is the level of output at which marginal revenue equals marginal cost the profit maximizing output?

Consider the world oil market, in which a cartel (OPEC) and a competitive fringe (rest of the world) are operating. Suppose that global oil demand and the supply of the competitive fringe are given by the following functions:

Qw=80-P

Qf=-60+p

suppose the cartel is comprised of 2 countries, let each countries marginal cost function be as follows:

MC1=5+2Q2

MC2=5+2Q2

1. Derive the marginal cost function (?C?) of the cartel. (2 pt)

2. Calculate the price at which the competitive fringe would be driven out of the

market (?1) and the price at which the cartel would be driven out of the market

(?2). (2 pt)

c. Due to the presence of the competitive fringe in the market, there will be a kink

point in the demand curve of the cartel. Calculate the price (?) and quantity (?) at

which this kink occurs. (2 pt)

d. Derive the demand function of the cartel to the left of the kink point quantity (i.e.,

for ?? ≤ ??�) and to right of the kink point (i.e., ?? ≥ ?). (2 pt) ????

e. Using the inverse demand function of the cartel, derive the corresponding marginal revenue function to the left of the kink point and to the right of the kink point. (2 pt)

f. Using the inverse demand and marginal revenue functions that you obtained in parts d. and e., calculate the cartel’s output (?? ) and the price charged per unit of output (??). ?? (2 pt)

7. Calculate the output of the fringe (?f ) at this price, along with the total output (?? + ?? ) supplied in the global oil market. (2 pt)

8. Calculate the output of each of the two members of the cartel; Q1 and Q2