1. (20 pts) The following questions deal with the market for electricity. In column I, answer with the following key:

A: equilibrium price increases

B: equilibrium price decreases

In column II, answer with the following key:

A: equilibrium quantity increases

B: equilibrium quantity decreases

Col. I   Col. II

_____ _____ a. Consumer incomes decrease (electricity is a normal good).

____      ____ b. Taxes are increased on electrical utilities (utilities produce electricity).

____      ____c. The price of coal rises (coal is an input in producing electricity).

____      ____ d. The population grows.

____     _____ e. The price of electrical appliances increases (appliances and electricity are complements).

____     ____   f. The price of natural gas decreases (natural gas and electricity are complements).

____    _____ g. Subsidies are reduced to electric utilities.

____     _____ h. A new technology makes it cheaper to produce electricity.

____     _____ i. A negative (adverse) supply shock hits the electricity market.

____     _____ j. It is summertime, and there is a seasonal increase in the demand for electricity.

Microeconomics Assignment 1 Dua

1. In Japan each unit of labor can produce 2 computers or 4 cell phones. In Canada each unit of labor can produce 3 computers or 5 cellphones.

a) Which country has absolute advantage of trade in producing cell phones?

b) Which country has absolute advantage of trade in producing computers?

c) Which country has a comparative advantage in producing computers?

d) Which country has comparative advantage in producing cell phones?

2. Label each of the following statements as a positive or a normative statement.

a) The minimum wage ought to be abolished.

b) A little bit of inflation is worse for society than a little bit of unemployment.

c) Society should take measures to prevent people from engaging in dangerous personal behavior.

d) The inflation rate has been rising for the last two years.

e) The government should not be running a budget deficit.

f) Per capita income in the United States has gone down in 2017.

Fiscal and Monetary Policy

So now, since you've learned a bit about policy, and the difficulties associated with its implementation, your task for this discussion is perhaps the most challenging one.

In your initial post, you are to write to either the President (on fiscal policy) or to the Chair of the Federal Reserve (on monetary policy) describing a specific policy action that you believe should be taken at this moment in time (e.g., lower taxes or buy bonds) and explain why you would take the action (what is currently happening in the economy and what will this action accomplish?). Your thoughtful post (of between 200 - 400words)You can learn about the current state of our economy by consulting newspapers or news websites..

Which of the following could lead to a will contest?

Which of the following could lead to a will being contested?

Sam has established a revocable inter vivos trust and has named the trustee the beneficiary of all his life insurance policies. His will provides that all of his residuary estate will “pour over” to the trust. All the following statements concerning this arrangement are correct EXCEPT

Even if spouse #1 specifically disinherits spouse #2, spouse #2 is likely to receive a portion of spouse #1's estate.

True

False

Of the following laws, which one does not regulate market structures?

Compare the elasticity of a monopolistic competitor’s demand with that of a pure competitor and a pure monopolist. Assuming identical long-run costs, compare the prices and outputs that would result in the long run under pure competition and under monopolistic competition. Contrast the two market structures in terms of productive and allocative efficiency. Explain: “Monopolistically competitive industries are populated by too many firms, each of which produces too little.”

Suppose that the U.S. government reduces the tariff on imported coffee, and a reputable study is published indicating that coffee drinkers have lower rates of colon cancer. What will the combined impact be on the equilibrium price and quantity of coffee? Explain your reasoning and show graphically the impact of these effects.

I sent the work I had to my professor, and he sent back this question: Keep in mind that in the short run assets are fixed. What impact does this have on supply?

This is the work I have so far, but I feel like I'm missing something due to the question he sent me (note: he won't help me more than that): Reasoning: If the tariff on imported coffee reduces, more coffee will be bought (and thus, more coffee is imported) by companies in order to gain a bigger profit; therefore, supply will shift to the right (most likely, supply would increase more than demand because of the reduced tariff + bigger profit companies can make) . Companies can sell the coffee at the same price since they did not have to pay as large a tariff to import it. Lower import cost with unchanged prices will make for a bigger profit. These are both proven by “more product will be bought the lower its price”. In addition, people will demand and buy more coffee when they see that a reputable study says coffee drinkers are at less risk for colon cancer. This shifts demand and moves the quantity equilibrium.

The orange and blue lines show the supply and demand of the coffee before the tariff is reduced. The thinner orange and blue lines (S1 and D1) show supply and demand after the tariff is reduced. Dashed lines show equilibrium between price and quantity. Q0 and P0 show the equilibrium before tariff is reduced. Q1 and P1 show the equilibrium after tariff is reduced. The end result is supply and demand both go through an increase (demand and supply move to the right), the price stays steady, and the quantity demanded equilibrium changes.

You work for a firm that is currently selling a generic allergy medication. Recently there was a new price control set in place which is currently slightly higher than the current market price. What events could occur which would cause the price ceiling to become binding? Give an example of a decision your company can make to get the equilibrium price back under the price ceiling.

What are the opportunity costs of developing wind farms to generate “clean” electricity? Should we make the investment?

1. Create a descriptive statistics table for our variables in word for submission (simply export from excel and cleaning it up a bit)

2. Create a table showing the variable names, coefficients, and p-values, indicating which variables are statistically significant for submission (export from excel and clean up a bit)

3. Write out the regression equation for sales here based on excel output:

4. Interpret the coefficient on our own price here:

5. If a manager increases our price by $2 then what is the predicted impact on sales?

Imagine the New Zealand economy is initially at the potential level of output, but that due to a decrease in house prices, the level of consumption within the economy falls (because consumer confidence decreased).

(a) Show what effect this has on the New Zealand economy in the context of an AD-AS diagram.

(i) Label the original long-run equilibrium point "A". Label the short-run equilibrium outcome of the decrease in house prices "B"

(ii) Briefly explain what happens to output and the inflation rate.

(b) Explain and show on your diagram in part (a) what would happen to output and the inflation rate in the long-run if the government does nothing to accommodate this shock. Label this long-run outcome "C".

(c) If the government accommodates this shock, what policies would return the economy to the potential level of output? Explain how these would work, and make sure you also explain what happens to output and the inflation rate.