13. If a 10% increase in the price of gas causes a 40% decrease in the demand for standard sized autos, then the cross-price elasticity of demand is:
Possible answers: -4.00    -3.00    -2.50    -2.00    -1.75    -1.33

14. If the price elasticity of demand of for gasoline is 2.7, then a 20% increase in the quantity demanded is caused by:
Possible answers: a. 7.41% decrease in the price of gasoline            b. 8.33% increase in the price of gasoline            c. 11.54% decrease in the price of gasoline             d. 11.54% increase in the price of gasoline            e. 16.67% increase in the price of gasoline            f. 16.67% decrease in the price of gasoline

15. Suppose the price of 40 inch LCD televisions decreases by 20%. If their price elasticity of demand is 0.85, then this price decrease will cause a:15.       a.    25% decrease in quantity demanded            b.   13% decrease in quantity demanded            c.    9% decrease in quantity demanded             d.    7% decrease in quantity demanded            e.   6% decrease in quantity demanded            f.   17% increase in quantity demanded

16. A business report claims that the median home price of existing homes fell from $300000 to $175000. Over the same time period the quantity demanded of these homes sold increased from 2150000 to 4200000. Using the arc elasticity formula, calculate the arc elasticity implied. The arc formula is: E = q1-q2/p1-2 * p1+p2/q1+q2
Possible answers: a. 0.200            b. 0.591            c. 0.193            d. 0.535            e. 0.715            f. 1.23

17. The demand for a product in income inelastic with an elasticity coefficient of 0.85. If there is a 25% increase in demand due to increased income, then the increase in income must be: a. 29.4%            b. 70.0%            c. 48%            d. 30.7%            e. 120%            f. 52.5%

Please show work on how you solved the problems.

Pick one or two real cases happened in your real life, try to find and analyze the economic law issues in them by using the rules we mentioned in Economic Law.

describe the similarities between utilitarianism and duty-based ethics.what are some examples of each?

1. a. We are analyzing the market for a particular good and are given the following equations for demand and supply: P=10-Q and P=Q-4. First, determine the equilibrium price and quantity in this market.

b. Suppose the government wants to create a disincentive for the consumption of this good by placing a tax on the good in the amount of $1. How much less will be sold? How much will the buyer pay and how much will the seller get?

c. How much different would the outcomes be if the tax was instead a subsidy (you can assume a subsidy in the same amount -- $1)? When would a subsidy be used?

Briefly explain why the unemployment rate is, on average, higher in many other developed countries than the United States and given examples of such higher averages. In your explanation, touch on at least 2 labor market factors.

What are the main arguments made by opponents of government “stimulus” spending? How does Wolfson address each of these points?

How is this question especially relevant in spring 2020?

Two firms, LexCorp and Wayne Enterprises, have access to five production processes, each one of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are as shown in the following table: Process (smoke) A (4 tons/day) B (3 tons/day) C (2 tons/day) D (1 ton/day) E (0 tons/day) LexCorp ($/day) 80 130 200 310 500 Wayne Enterprises ($/day) 150 190 240 300 370 a. If pollution is unregulated, which production process will each firm choose, and what will be the total daily smoke emission? The firms will choose . The total daily smoke emission would be per day. b. The City Council wants to reduce total emissions down to 2 tons of smoke per day. To accomplish this, it requires each firm to reduce its emissions to 1 ton of smoke per day. What will be the total cost to society of this policy? Total cost to society will be $ . c. The City Council again wants to reduce total emissions down to 2 tons of smoke per day. This time the City Council sets a tax of $T per day on each ton of smoke emitted. How large will T have to be to reduce total emissions down to 2 tons of smoke per day? Specifically, what is the smallest whole dollar tax on each ton of smoke emitted that will guarantee that total emissions fall to 2 tons per day? Under this tax, what production process will each firm choose? If the revenue collected from taxing emissions is used to offset other taxes, then what will be the total cost to society of this policy? T would have to be $ . Under this tax, LexCorp will choose and Wayne Enterprises will choose . The total cost to society would be $ . d. Comparing the policy in part b and part c, which imposes the smallest total cost on society? Explain. The policy in part b because it concentrates pollution reduction at the firm whose marginal cost of reducing pollution is the lowest. The policy in part c because it concentrates pollution reduction at the firm whose total cost of reducing pollution is the lowest. The policy in part c because it concentrates pollution reduction at the firm whose marginal cost of reducing pollution is the lowest. The policy in part b because it concentrates pollution reduction at the firm whose total cost of reducing pollution is the lowest.

The price of a large pizza decreased from $14.00 to $10.00. As a result, the quantity demanded of skateboards increased from 310.00 to 330.00.

a. Using the midpoint formula, what is the percentage change observed for the price of a large pizza? (Give your answer to two decimal places)

b.Using the midpoint formula, what is the percentage change observed for the quantity demanded of skateboards? (Give your answer to two decimal places.)

c.What is the cross-price elasticity of demand between pizzas and skateboards? (Give your answer to two decimal places.)

1. Given the following, depict fully and explain break-even in units, break-even in dollars, total revenue line, total cost line, fixed cost line, break-even point, etc.

Fixed Cost: $120,000

Sales per Unit: $15.00

Variable cost per Unit: $3.00

Include a discussion regarding sensitivity analysis for an inelastic product.

In many countries, armed forces rely both on volunteers and conscription for military service. For example, in Denmark, eligible men for military service are required to draw a number. Depending on the number they draw, they may get drafted if there aren't enough volunteers.

Consider a very simple game with two risk-neutral players, who are eligible for military service.[1]The Army needs only one of them.

Player 1 moves first, and decides whether or not to volunteer.

If Player 1 volunteers, then the game ends. Player 1 receives a payoff of (B -C), where B represents the benefit of volunteering and C represent the cost of joining the army, respectively. (You can think of both monetary and non-monetary benefits and costs). In this case, Player 2 gets a payoff of zero.

If Player 1 does not volunteer, then Player 2, who observes this decision, decides whether or not to volunteer.

Similarly, if Player 2 volunteers, the game ends with leaving Player 2 a payoff of (B -C), whereas Player 1 obtains a payoff of 0.  If Player 2 does not volunteer either, then the army drafts one of the players with the luck of the draw. Therefore, Player 1 and Player 2 gets drafted with an equal probability. 0.5. As the result of the draw, the player who ends up being drafted receives a payoff of –C (since the benefits of volunteering does not accrue in this case). The player who ends up not being drafted receives a payoff of 0.

a) I suggest for you to start by drawing the game tree, using Nature as a non-strategic player representing the (possible) uncertainty in the game. You do NOT need to turn this tree in, but it will be helpful to sketch it out.

b)    Let B=400 and C=600. What is the rollback equilibrium of this game? [10 points]

c)     Does this game with the payoff structure described in (b) exhibit first-mover advantage, second-mover advantage, or neither? Explain. [10 points]

d)    Now consider that Player 2 has a different value of C than Player 1.  Determine the minimum value of C, which makes the following commitment credible: “I will not volunteer regardless of what you do.” [10 points]

e)     Choose a larger value of C than you found in part (d), and solve the game for rollback equilibrium. Is the equilibrium outcome different than the one you have described in part (b)? [10 points]

Review Handout | Absolute Advantage and Comparative Advantage | Cases 1-3 (3 pages)

*Holding other things constant and considering the usual assumptions for the 2C-2G-1F model and production per unit of labor for both Case 1 and Case 2 below, determine which country has the absolute advantage and comparative advantage in which good.

Example Case 1

To determine who has a comparative advantage in which good, we will need to calculate opportunity costs of good X and good Y in each country first.

In the case of Country A above, the opp. cost of X (in terms of Y) is the number of units of Good Y Country A should give up in order to produce one more unit of Good X.   To find out this, we can simply divide the number of Good X and Good Y per unit of labor in each cell by 60, respectively, so that we can see how many units of Good Y Country A should give up to produce one more unit of Good X in Country A.   As shown above, it will be 1.33.  

By the same token, in the case of Country A, the opp. cost of Y (in terms of X) is the number of units of Good X Country A should give up in order to produce one more unit of Good Y.   To find out this, we can simply divide the number of Good Y and Good X per unit of labor in each cell by 80, respectively, so that we can see how many units of Good X Country A should give up to produce one more unit of Good Y in Country A.   As shown above, it will be 0.75.  

1. Which country has an absolute advantage in producing X and Y, respectively?

Hint) Per unit of labor, which country is producing Good X (Good Y) more in absolute terms?

2. Country A has a comparative advantage in producing:

3. Country B has a comparative advantage in producing:

Case 2

1. Which country has an absolute advantage in producing wine and wool, respectively?

2. Portugal has a comparative advantage in producing:

3. The U.K. has a comparative advantage in producing:

Case 3. Now assume that country “American” can produce either 20 songs or 40 boxes of roses per week. Assume that country “Eagle” can produce 10 songs or 50 boxes of roses per week. Consider the usual assumptions holding other things constant.

1. Which has a comparative advantage in the production of songs?

2. Which has a comparative advantage in the production of roses?

3. If each produces songs for one week and then roses for one week, show the total    production of both goods.

4. Now, assume each country specializes for two weeks. Indicate the total production of both goods. Show that trade between the two countries after this two-week period can allow both countries to consume both more roses and songs.