In: Economics
The main participants/ competitors in food/groceries industry?
In: Economics
If a centrral bank were required to target inflation at zero, then when there was a negative aggregate supply shock the central bank
a. would have to increase the money supply. This would move unemployment closer to the natural rate.
b. would have to increase the money supply. This would move unemployment further from the natural rate.
c. would have to decrease the money supply. This would move unemployment closer to the natural rate.
d. would have to decrease the money supply. This would move unemployment further from the natural rate.
In: Economics
Discuss role play by Bank in the monetary system? How do bank create money?
[10 Marks]
In: Economics
Foreign Exchange Markets
a. Define an exchange rate and Graph the foreign exchange market illustrating the dollar price of the pound - label all curves and each axis
b. Explain what the demand and supply curves in this market measure
c. Explain how the exchange rate automatically eliminates surpluses and shortages in the Foreign Exchange Market.
d. If the foreign exchange ratio for USD/British Pound = $1.35; how much will it cost for an American to buy a $50 pair of shoes imported from Britain; How much will it cost an Englishman to buy a $50 pair of shoes exported from the US to Britain?
e. Identify one factor that causes a currency to depreciate - graph the solution. Repeat for depreciation.
In: Economics
A frequently heard complaint about merit raises is that they do little to increase employee effort. What are the causes of this belief? Suggest ways in which the motivating value of merit raises may be increased.
In: Economics
Four economic profit theories are: Frictional Profit Theory, Monopoly Profit Theory, Innovation Profit Theory, and Compensatory Profit Theory. For each one discuss how it may affect the efficiency and the allocation of resources in the economy.
In: Economics
Define and defend (in Constitutional AND practical terms) what role Congress should play in making decisions on the use of both covert and overt military force.
In: Economics
Describe the roles of the World Bank (WB), International Monetary Fund (IMF), and World Trade Organization (WTO) in the acceleration of globalization.
In: Economics
Firms x, y, and z produce and sell an identical product and operate in an oligopolistic market whose daily demand is
Q = 720 – 4P. Their respective T.C. functions per day are:
T.C.x = 2,600 + 1.25Q2, T.C.y = 2,400 + 1,25Q2, and T.C.z = 1,800 + 1.25Q2
Assume that these three firms agree to join efforts to create a cartel and act as a monopoly and agree to the following market shares of the artificially created monopoly’s optimum output or Q*: Firm x: 40%, Firm y: 35%, and Firm z: 25%. They also agree to charge the same price. Please show your work clearly in answering the following questions:
If the three firms live up to their agreement, how many units will each firm produce and what price will each firm charge?
If none of the three firms cheats on the agreement, what will profits be for each of these firms?
In: Economics
The average resident has a demand for fresh oranges which is a linear function of the prices of the three goods.
Q=4000 - 200 f + 100 c + 400 p
The subscript ‘f’ denoted fresh oranges, the subscript “c” OJ(orange juice) concentrate, and the subscript “p” peanuts.
Question: Assuming the price of OJ concentrate is fixed at $1 and fresh oranges’ price is fixed at $6, find the cross-price elasticity of demand for fresh oranges relative to peanuts for the average consumer when the price of peanuts is at $2, $8, and $10. What does that tell you about how the average consumer’s views fresh oranges compared to peanuts?
In: Economics
A business has 10 employees. Their annual wages (to the nearest thousands of dollars) are as follows:
42, 33, 27, 47, 60, 36, 45, 66, 47, 31
A. Calculate the following, showing all calculations:
mean
median
mode
range
Variance
Standard Deviation
Coefficient of variation
B. Assume that the data values shown above represent "x". Compute the following:
1. (∑x)^2
2. ∑x^2
C. What would change in part A if the numbers represented a sample?
In: Economics
CASE STUDY 3 : SMOKING AT IKE’S BAR-B-Q PIT
By 2013, only 10 states in the U.S. had not issued statewide bans on smoking in any nongovernment-owned spaces. Ike’s Bar-B-Q Pit is located in a state that allows smoking in restaurants and bars. Some of Ike’s nonsmoking customers, including some who suffer from asthma, have petitioned Ike to adopt a no-smoking rule for his restaurant. Upon hearing of the petition, some of Ike’s other customers complained that they have smoked in Ike’s restaurant for years and would not patronize the restaurant if the no-smoking rule were adopted. Ike is greatly concerned because he does not wish to lose business from either his smoking or nonsmoking customers.
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Private Solutions to Externalities: The Coase Theorem Learning Objective: Discuss the Coase theorem and explain how private bargaining can lead to economic efficiency in a market with an externality. Although government intervention may increase economic efficiency in markets where externalities are present, it is possible for people to find private solutions to the problem of externalities. Ronald Coase made this argument in a 1960 article. To understand Coase’s argument, it is important to understand that completely eliminating an externality is usually not economically efficient. A. The Economically Efficient Level of Pollution Reduction The optimal decision is to continue any activity up to the point where the marginal benefit equals the marginal cost. This applies to reducing pollution just as much as other activities. As pollution declines, society benefits, but the marginal benefit from eliminating another unit of pollution declines as emissions are reduced. As pollution declines, the marginal cost of further reductions rises. The net benefit to society from reducing pollution is equal to the difference between the benefit of reducing pollution and the cost. To maximize the net benefit to society, any type of pollution should be reduced to the point where the marginal benefit from another ton of reduction is equal to the marginal cost. B. The Basis for Private Solutions to Externalities In arguing that private solutions to the problem of externalities were possible, Ronald Coase emphasized that when more than the optimal level of pollution is occurring, the benefits from reducing the pollution to the optimal level are greater than the costs. C. Do Property Rights Matter? Ronald Coase pointed out that the amount of pollution reduction will be the same whether polluters or the victims of pollution are legally liable for damages. Bargaining between the parties will result in the same reduction in pollution, where the marginal benefit of the last unit of reduction is equal to the marginal cost. D. The Problem of Transactions Costs There are frequently practical difficulties in the way of a private solution to the problem of externalities. For example, if many people suffer from the negative effects of pollution, bringing all the victims together with all the producers of the pollution to negotiate an agreement often fails due to high transactions costs. Transactions costs are the costs in time and other resources that parties incur in the process of agreeing to and carrying out an exchange of goods or services. E. The Coase Theorem The Coase theorem is the argument of economist Ronald Coase that if transactions costs are low, private bargaining will result in an efficient solution to the problem of externalities. Private bargaining is most likely to reach an efficient outcome when the number of bargaining parties is small and all parties are willing to accept a reasonable agreement. |
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Because Ike’s restaurant is not in a state that regulates smoking in public places, Ike decides to meet with his smoking and nonsmoking customers to accommodate both of their wishes regarding his smoking policy.
In: Economics
In: Economics