In what ways can economic incentives and cost/benefit analysis be used to strengthen existing policies? What concerns might there be in utilizing such approaches?
(a) What are the characteristics of markets which are Monopolistic Competition? (b) How do firms determine their output and price in the short-run and long-run under Monopolistic Competition? (c) What is the role of product differentiation in Monopolistic Competition? Show graphically and explain.
Economics of Innovation and Intellectual Property Rights:
- Patents, copyrights, and trademarks - R&D races, digital innovation- regulation of digital platforms.
Write a page, adding your own analysis.
Although US can be considered as an example of capitalism, discuss if the United States still fits the model. Provide examples to support statements.
The company’s discount rate is 12%. Assume that the annual cash flows arise on the anniversaries of the date of purchase.
Calculate the net present value and payback for each project and state which project the company should accept and why.
Eric has the utility function U(x, y) = x0.5y0.5, where x denotes the amount of food consumed and y the amount of clothing. Now suppose that he has an income of $80 per week and that the price of clothing is Py = $2 per unit. Suppose that the price of food is initially Px1 = $2 per unit and that the price subsequently increases to Px2 = $8 per unit.
Suppose the initial consumption basket, when the price of food is $2, is A. When the price of food is $8, Eric buys ? units of x. The price effect is ? units of food. At the initial basket A, Eric’s utility is ? . At the decomposition basket, B, Eric gets the utility equals the initial basket A. Basket B contains ? units of x. The substitution effect is, therefore, ? units of food, and the income effect is ? units of food. At the final basket, Eric’s utility is ?.
Using the incremental B/C method for comparing mutually exclusive alternatives always results in the same economically preferred alternatives as using the PW method.
When selecting projects based on the payback period method, a project with a shorter payback period is generally preferred.
One of the shortcomings of using the discounted payback period to select alternatives is that
a)it ignores all the cash flows beyond the payback period
b)it gives more weight to the cash flows beyond the payback period
c)it does not take into account the interest rate
A project with a higher net PW than a competing project of the same service life will also always have a higher B/C ratio.
When comparing mutually exclusive alternatives with the same service lives, the alternative with the highest B/C ratio is always the most economical.
Given the following information for a project: initial capital cost = $240,000; annual revenues = $60,000 and annual costs = $20,000; its simple payback period is most nearly equal to
"How A Tax On Chicken Changed The Playing Field For U.S. Automakers"
German families in the 60s loved cheap American-raised chicken. And Americans loved cheap VW Beetles. The report is about how a trade dispute over frozen chicken parts changed the American auto industry.
In the early '60s, the U.S. was going through a Beetle invasion - and no, not John, Paul, George and Ringo. German Beetles cars were everywhere in the late '50s and early '60s.Everybody had to have one Beetle, two Beetles. They had to have a Beetle plus a Volkswagen bus. And it became sort of a cult object.
Now, while the U.S. was falling in love with the Beetle, postwar Europe had arisen again and was starting to buy cheap, delicious frozen American chicken. In Germany, there's a lot of fast-food fried chicken places, and it's an extremely popular food. And the U.S., of course, at the time and probably today, is the world's most efficient producer of chickens.
In one year, sales of U.S. chicken in West Germany went up nearly 23 percent. Now German chicken farmers got all worried, so their government slapped a nearly 50 percent tariff on our chicken. In retaliation, we looked around for something we could tax, so we found German pickup trucks. And in 1963, the U.S. put a 25 percent tariff on all trucks imported from outside the U.S. It's called the chicken tax. The chicken tax is one of the most important determinants of how the industry looks today and how it operates today in the U.S.
That's because essentially from that point forward, U.S. pickup truck makers had no foreign competition. He says if not for the chicken tax, pickup trucks in general would be less expensive, there would be more choice. And they would be more fuel efficient on average. The flipside of that is we would have fewer plants in the U.S. building pickup trucks.
What type of trade barrier is this report discussing? Can you list another FOUR types of trade barriers?
Is the chicken tax against free trade? Why do you think the chicken tax is still needed today?
"Organic Farmers Call Foul On Whole Foods' Produce Rating System"
Nobody really likes to be graded. Especially when you don't get an A.
Some organic farmers are protesting a new grading system for produce and flowers that's coming into force at Whole Foods. They say it devalues the organic label.
The rating system is called "Responsibly Grown." And the company developed it as a way to give customers more information about how their food is grown, says Matt Rogers, a global produce coordinator for Whole Foods.
The labels on produce at Whole Foods always told shoppers what country or state supplied those vegetables, as well as whether it was grown organically.
The new rating system takes into account much more.
Whole Foods is asking its suppliers to pay a fee to get into the program, then answer a long questionnaire. There are questions about how they protect the soil and wildlife on their farms, whether they limit their use of pesticides, how they conserve energy and irrigation water and how they treat their workers.
Based on those answers, a farm's produce gets a grade: Unrated, Good, Better or Best. Those grades show up right beside each bin of produce on brightly colored stickers with the words: "Responsibly Grown."
Rogers says that more than 50 percent of the farms that have gone through this process so far have been rated "Good." "We have few examples of 'Best' ratings at this point," he says.
But here's what is making organic farmers angry. At a Whole Foods store in Washington, D.C., I found nonorganic onions and tomatoes, presumably grown with standard fertilizers and pesticides, that were labeled "Best." A few feet away, I found organic onions and tomatoes that were graded merely "Good" or just "Unrated."
For Vernon Peterson, who grows and packs organic fruit in Kingsburg, Calif., this is dumbfounding.
"Organic is responsibly grown, for goodness sake," he says. "Organic should be the foundation of anything that Whole Foods might do."
Whole Foods says its new rating system is a way to talk to farmers and customers about issues that the organic rules don't encompass, like water, energy, labor and waste.
Peterson says that organic certification is harder to get and means more than the new ratings from Whole Foods. Following the organic rules is expensive, and there are third-party auditors making sure that you follow those rules, he adds. There are no such outside auditors in the Whole Foods system.
What kind of perspective has Whole Food demonstrated on their corporate social responsibility, minimalist, cynical, defensive, or proactive?
Is "Responsibly Grown" a Philanthropy program, or a strategic CSR program?
What stakeholders may benefit from Whole Food's new rating system?
In 200 words answer the following question. What caused the outbreak of the Mexican-American War? Who opposed the war, and why?
(2) We have studied auctions being run by sellers, but there are also auctions run by buyers. These are called reverse auctions or procurement auctions. Suppose that a company wants to buy one unit of a good. This company announces that they will run a second price procurement auction. The company will collect offers to sell one unit of the good from each of a group of firms and will buy the good from the firm that offers to sell it at the lowest price. This firm will be paid the second lowest offer. So for example if three firms, 1, 2 and 3, make offers of $1,000, $2,500 and $2,000, respectively, then the company will buy the good from firm 1 and will pay firm 1 a price of $2,000 for it. There are in fact three firms that are willing to sell the good. The cost of the good for firm i is ci . These costs are private information to the firm and they are independent. If firm i sells the good at price p then firm i makes a profit of p − ci . If firm i does not sell the good its profit is 0. The objective for each firm is to maximize its own profit. Each firm knows its own cost but not the costs of the other firms. You make decisions for firm 1. Your cost is $5,000. What offer should you submit and why?
1-How bad the coronavirus pandemic will affect the economy and the unemployment rate. also, how long do you expect the economic impact to last? and are we on the verge of another recession?
Note the answer at least should be three paragraphs
Unemployment and Inflation
Two of the biggest issues in macroeconomics are inflation and unemployment. Policymakers would like to keep both of these measures low. Often, however, there is a tradeoff between the two. A strong economy that lowers unemployment can put upward pressure on prices. A weak economy that lowers inflation can increase unemployment.
We currently have the benefit of both very low unemployment and inflation. But things could change and it’s good to have policy plans in place before either of these problems gets too bad.
Imagine that you are in charge of macroeconomic policy. Answer these questions, being sure to explain your answers.