The following equations describe a firm’s demand, marginal revenue, total cost, & marginal cost:

Demand: P = 1,000 – 10Q

Total Cost: TC = 500 + 10Q + Q^2

Marginal Revenue: MR = 1,000 – 20Q

Marginal Cost: MC = 10 + 2Q

a. What level of output should be produced to maximize profits?

b. What is the market price?

c. How much profit will be earned?

d. The firm sells cereal and competes with other firms selling slightly differentiated cereal products. What type of market is this firm operating in?

The following equations describe a firm’s total cost and marginal cost:

Total Cost: TC = 500 + 10Q + Q^2

Marginal Cost: MC = 10 + 2Q

e. If the firm is a price taker and other firms in the industry sell output at a price of $100, what price should the manager of this firm put on the product?

f. What level of output should be produced to maximize profits?

g. How much profit will be earned?

h. The firm sells orange juice, which is a perfect substitute, at a farmers market. What type of market is this firm operating in?

With the basic income-leisure choice model, show possible labor supply curve for the followings.

a. The poor who are at a minimum subsistence and who aspire to middle-class consumption patterns.

b. “workaholics” who have strong preferences for labor market work.

c. The wealthy who aspire to be idle rich.

d. Workers who are reluctant to change their work hours

How will the environment affect the airline industry? Give at least 10 affects and explain each

What are ways that governments are different from households? How do these differences result in needing to treat government deficits differently than households being in debt?

Consider the used-car market for the Ford Pinto described in class. There is now a surge in demand for used Pintos; buyers would now be willing to pay up to $17,000 for a peach and $7,000 for a lemon. All else remains identical to the example seen in class.

a. What price would buyers be willing to pay for a Pinto of unknown type if the fraction of peaches in the population, f, were 0.75?

b. Will there be a market for peaches if f=0.75? Explain.

c. What price would buyers be willing to pay if f were 0.5?

d. Will there be a market for peaches if f=0.5? Explain.

e. What is the minimum value of f such that the market for peaches does not collapse?

f. Explain why the increase in the buyers’ willingness to pay changes the threshold value of f, where the market for peaches collapse.

30. An increase in household saving causes consumption to

A. rise and aggregate demand to increase.

B. rise and aggregate demand to decrease.

C. fall and aggregate demand to increase.

D. fall and aggregate demand to decrease.

35. Which of the following Fed actions would both decrease the money supply?

A. buy bonds and raise the reserve requirement

B. buy bonds and lower the reserve requirement

C. sell bonds and raise the reserve requirement

D. sell bonds and lower the reserve requirement

38. Sometimes during wars, government expenditures are larger than normal. To reduce the effects this spending creates on interest rates,

A. the Federal Reserve could increase the money supply by buying bonds.

B. the Federal Reserve could increase the money supply by selling bonds.

C. the Federal Reserve could decrease the money supply by buying bonds.

D. the Federal Reserve could decrease the money supply by selling bonds.

Discuss your position on the following concerning Section 936 of the Internal Revenue Code: The 936 companies were criticized for arguing that they only defended their tax benefits without supporting local development as a research and high-tech center.

In Africa, the continent where the polio epidemic has been most difficult to control, international relief efforts aimed at disease eradication often work against a backdrop of civil unrest and war.  In some countries, temporary cease-fire agreements must be negotiated to allow vaccination and prevent serious outbreaks from occurring.  During peacetime and during war, low incomes make paying for the vaccine a real problem among the poor.  To make the oral polio vaccine more affordable, either consumer purchases (demand) or production (supply) can be subsidized.  Consider the following market demand and market supply curves for a generic oral polio vaccine:

Q_D     =  24,000 - 2,000P                (Market Demand)

Q_S     =  -4,000 + 1,500P                (Market Supply)

where Q is output measured in doses of oral vaccine (in thousands), and P is the market price in dollars.

1. Find the current equilibrium price and quantity in this market.
2. Find the equilibrium price and quantity in this market if the government offers a $7.00 per unit subsidy for providers of the vaccine.

c.   What will happen to the price buyers pay per dose of the vaccine as a result of the subsidy?

d.   What price will providers actually receive (net price) per dose yard after the subsidy?

e.   How much will this subsidy cost the government?

f.    Now suppose the government decides on a different policy. Calculate the equilibrium price/o\

tput solution after the institution of a voucher system whereby consumers can use a $7.00 voucher to supplement cash payments.

g.   What will happen to the net price buyers pay per dose of the vaccine as a result of the vouchers?

h.   What price will providers actually receive per dose after the vouchers?

i.    How much will this system of vouchers cost the government?

j.    Discuss the differences in these two approaches to helping solve the polio epidemic.

A firm that is in an oligopoly market will try to attain the benefits (for them) of acting like a monopoly by colluding with the other firms in the market and forming a cartel. However, these can break down to the point where the market is more similar to a competitive market. Explain why these agreements often break apart (be sure to include explanation of the Nash equilibrium and Dominate Strategy).

Why does an oligopoly market not just become a competitive market?

What are the problems with the current patent laws that relate to technology? Research the Internet regarding issues being mentioned by incumbent corporations versus start-ups.  

Suppose a typical income leisure constraint. The wage rate for a typical consumer is $20 per

hour, and she works 10 hours per day. Assume there are 52 weeks per year.

a. Construct a yearly income-leisure constraint for this consumer. Graphically show the optimal

work-leisure choice for this consumer.

b. Assume that the wage rate is increased to $25 per hour. Assuming income effect dominates,

graphically show a new possible work-leisure choice for this consumer.

c. Suppose that the government considers an income supplement program for this consumer

providing $5000 per year. Assuming holding all of the assumptions given in #b, is it a good

policy for the economy in general for this society? Explain it with the relevant economic

theoretical justifications.

First National Bank Balance sheet

                              Assets            Liabilities

Rate-sensitive    $20 million         $50 million

Fixed-rate           $80 million         $50 million

4) Given the above table and assuming that the average duration of its assets is four years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First National to ________ (increase/decline) by ________ (5% /10%/ 15%/ 20%) of the total original asset value (use duration analysis).

Moral Dilemma
A moral dilemma involves a situation in which the agent has only two courses of action available, and each requires performing a morally impermissible action.. Plato presents the classic example of a moral dilemma. A man borrows a weapon from his neighbor promising to return it at his neighbors request. One day the neighbor in a fit of rage, asks for the weapon back apparently with the intention to kill someone. The man is faced with a dilemma: if he keeps his promise, then he will be an accessory to a murder if he refuses to hand over the weapon, than he violates his promise. A moral dilemma, then, is a situation, involving a choice between two opposing courses of action, where there are moral considerations in support of each course of action. Few would doubt whether we are in fact faced with difficult moral choices. The question raised by philosophers, though, is whether such dilemmas can be systematically resolved, or whether no systematic solution is available.

The most commonly suggested method of resolving conflicts between obligations is to appeal to the highest intrinsic good. A thing is intrinsically good when it is valued for itself and not merely as an instrument or means to some further end. Money is instrumentally good since it only provides a means to some further good, such as the purchase of a sports car. Music, on the other hand, is thought to be intrinsically good since it is valued for itself and not as a means to something else. Moral philosophers are concerned with uncovering the highest intrinsic good - that which is at the apex of everything that is valued. Human happiness is a common candidate for the highest intrinsic good since everyone strives for happiness, and happiness appears to be the final goal of all our actions. Other nominees for the highest intrinsic good are pleasure, human rationality, God’s will, free human choice, and highly evolved conduct.

Theoretically, if we can determine that pleasure, for example, is the highest intrinsic good, then conflicts between moral obligations would be resolved by determining which course of action produces the most pleasure. Similarly, if God’s will is determined to be the highest intrinsic good, priority would be given to those actions which are most in accord with God’s will. Thus, by locating the highest intrinsic good, moral dilemmas are resolved by appealing to that concept.

Assignment
The following is a list of some moral dilemmas, mostly adapted from Moral Reasoning, by Victor Grassian (Prentice Hall, 1981, 1992). Read each situation carefully.

You are to respond to the following directions for FOUR (4) of the eight dilemmas presented.

• Describe the decision that you would make in the situation and explain. Why.
• Identify the moral theory/ethic (such as “I would follow my conscience,” “I would do what God or the scriptures say is right,” “I would follow the advice of an authority,” etc.) on which you based your decision and explains how it applies to this situation.
• At the conclusion of responding to four of the moral dilemmas, write a final paragraph in which you compare the moral values you presented in your answers. State whether your answers consistently used the same theories/ethics or greatly varied. Based on your analysis of your moral values presented above, describe your general conclusions about your own “moral compass.”
*You should have a total of five (5) paragraphs; each one should be between 4-8 sentences. Grammar and format count.




1. The Overcrowded Lifeboat
In 1842, a ship struck an iceberg and more than 30 survivors were crowded into a lifeboat intended to hold 7. As a storm threatened, it became obvious that the lifeboat would have to be lightened if anyone were to survive. The captain reasoned that the right thing to do in this situation was to force some individuals to go over the side and drown. Such an action, he reasoned, was not unjust to those thrown overboard, for they would have drowned anyway. If he did nothing, however, he would be responsible for the deaths of those whom he could have saved. Some people opposed the captain’s decision. They claimed that if nothing were done and everyone died as a result, no one would be responsible for these deaths. On the other hand, if the captain attempted to save some; he could do so only by killing others and their deaths would be his responsibility; this would be worse than doing nothing and letting all die. The captain rejected this reasoning, since the only possibility for rescue required great effort of rowing, the captain decided that the weakest would have to be sacrificed.. In this situation it would be absurd, he thought, to decide by drawing lots who should be thrown overboard. As it turned out, after days of hard rowing, the survivors were rescued and the captain was tried for his action. If you had been on the jury, how would you have decided?

2. A Father’s Agonizing Choice
You are an inmate in a concentration camp. A sadistic guard is about to hang your son who tried to escape and wants you to pull the chair from underneath him. He says that if you don’t he will not only kill your son but some other innocent inmate as well. You don’t have any doubt that he means what he says. What should you do?

3. Sophie’s Choice
In the novel Sophie’s Choice, by William Styron (Vintage Books, 1976 — the 1982 movie starred Meryl Steep & Kevin Kline), a Polish woman, Sophie Zawistowska, is arrested by the Nazis and sent to the Auschwitz death camp. On arrival, she is “honored” for not being a Jew by being allowed a choice: One of her children will be spared the gas chamber if she chooses which one. In an agony of indecision, as both children are being taken away, she suddenly does choose. They can take her daughter, who is younger and smaller. Sophie hopes that her older and stronger son will be better able to survive, but she loses track of him and never does learn of his fate. Did she do the right thing? Years later, haunted by the guilt of having chosen between her children, Sophie commits suicide. Should she have felt guilty?

4. The Fat Man and the Impending Doom
A fat man leading a group of people out of a cave on a coast is stuck in the mouth of that cave. In a short time high tide will be upon them, and unless he is unstuck, they will all be drowned except the fat man, whose head is out of the cave. [But, fortunately, or unfortunately, someone has with him a stick of dynamite.] There seems no way to get the man loose without using [that] dynamite which will inevitably kill him; but if they do not use it everyone will drown. What should they do?

5. A Callous Passerby
Roger Smith, a quite competent swimmer, is out for a leisurely stroll. During the course of his walk he passes by a deserted pier from which a teenage boy who apparently cannot swim has fallen into the water. The boy s screaming for help Smith recognizes that there is absolutely no danger to himself if he jumps into save the boy-he could easily succeed if he tried. Nevertheless, he chooses to ignore the boy’s cries. The water is cold and he is afraid of catching a cold — he doesn’t want to get his good clothes wet either. “Why should I inconvenience myself for this kid,” Smith says to himself and passes on. Does - Smith have a moral obligation to save the boy? If so, should he have a legal obligation [“Good Samaritan” laws] as well?


6. A Poisonous Cup of Coffee
Tom, hating his wife and wanting her dead, puts poison in her coffee, thereby killing her. Joe also hates his wife and would like her dead. One day, Joe’s wife accidentally puts poison in her coffee, thinking it’s cream. Joe has the antidote, but he does not give it to her. Knowing that he is the only one who can save her, he lets her die. Is Joe’s failure to act as bad as Tom’s action?

7. The Torture of the Mad Bomber
A madman who has threatened to explode several bombs in crowded areas has been apprehended. Unfortunately, he has already planted the bombs and they are scheduled to go off in a short time. It is possible that hundreds of people may die. The authorities cannot make him divulge the location of the bombs by conventional methods. He refuses to say anything and requests a lawyer to protect his 5th amendment right against self-incrimination. In exasperation, some high level official suggests torture. This would be illegal, of course, but the official thinks that it is nevertheless the right thing to do this desperate situation. Do you agree? If you do, would it also be morally justifiable to torture the mad bomber’s innocent wife if that is the only way to make him talk? Why?

8. The Partiality of Friendship
Jim has the responsibility of filling a position in his firm. His friend Paul has applied and is qualified, but someone else seems even more qualified. Jim wants to give the job to Paul, but he feels guilty, believing that be ought to be impartial. That’s the essence of morality, he initially tells himself. This belief is, however, rejected, as Jim resolves that friendship has a moral importance that permits, and perhaps even requires, partiality in, some circumstances. So he gives the job to Paul. Was he right?

From your perspective, which IR theory/theories best describe how states and other actors in the international community should respond (or have responded) to the ongoing pandemic. Explain your reasoning, demonstrating a brand understanding of the IR theory in essay form.