The post-war era was rough on the movie business. What schemes and tools are the theatres using today? Are they effective?

Explain why win-win situation is better than trade is a zero-sum game.

Explain what happens to a commercial bank’s reserves and checkable deposits after it has made a loan.

1. Romer (1990) divided economic goods into objects and ideas.
   1. How are ideas and objects different?
   2. Why is the distinction important for economic growth?
   3. Can you explain it in terms of conventional microeconomic theory?
   4. Can you think of two examples of ideas important in economic activity other than the ones we have discussed in class?

Case Study on Walmart using IT

A major reason for Wal-Mart’s success over the year was its constant emphasis on installing the most modern IT systems, which helped it achieve better economy of scale, distribution efficiency and pass on the benefits of the same to the customers. By offering low price to customers, Wal-Mart was able to generate more sales and minimize the promotional expenditure of the company.

By using IT, Wal-Mart was able to establish proper communication links with its suppliers, distribution centers and individual stores. Wal-Mart employed Electronic Data Interchange (EDI) that linked the computers at the stores, its distribution center and even key suppliers like P&G. In order to make its distribution system more efficient and to establish stronger links with its suppliers, Wal-Mart installed the satellite communication system at an estimated cost of $700 million. The system connected all the operating units of company and the general office with two way voice, data and video communication. Wal-Mart could keep a constant track of the movement of inventory from the manufacturing to the distribution centers and finally, to the stores. Its thousands of suppliers could obtain daily sales reports. The system also helped Wal-Mart to automate the inventory replenishment process.

Wal-Mart also used IT to improve its supply chain efficiency. Wal-Mart installed “Retail link” system that connected EDI networks to an extranet accessed and used by Wal-Mart’s business customers and its thousands of suppliers to obtain data relating to sales and stock levels at every Wal-Mart stores. The data enabled Wal-Mart’s suppliers to analyze market trends, undertake the necessary stock replenishment and plan out their production schedules to cater to Wal-Mart’s needs.

Apart from investing in building advance IT system Wal-Mart simultaneously built massive database of point of sales data at each of its stores. Using data mining Wal-Mart was able to determine the needs and preferences of its customers up to an individual store level and customize its merchandise according.

Q1. What are the benefits Wal-Mart obtained by using modern IT systems for its business and customers?

Q2. Briefly explain the benefit of using EDI over manual systems. Also explain all the benefits discussed in this case that is obtained by Wal-Mart by using EDI and satellites.

Q3. How can Wal-Mart customize merchandise for each store?                           

Q4. How Retail-link system helped the suppliers of Wal-Mart?   

16. Which one do you agree, “trade is a zero-sum game” or “trade is a win-win situation”? Explain your answer.

2. In a model of dynamic increasing returns, illustrate an alternate scenario to what we discussed in class and briefly explain using words. In this scenario, France protects its cotton industry with a temporary blockade, but after the blockade ends the protection is not enough for France to retain an advantage in cotton production, and once UK cotton is no longer blockaded, that the UK will recover its initial advantage. Be sure to draw and label any necessary learning curves (UK and France), and any relevant points on the curves.

Consider a model of increasing returns to scale with symmetric firms.

a) Algebraically show what the equilibrium number of firms, price, and average cost must be, in terms of their equations. You may start from the equations relating price to the number of firms p=c+1/bn, and average cost to the number of firms AC=Fn/S+c.

B) with the aid of a diagram, illustrate what happens to the equilibrium number of firms, prices, and average cost when one country opens up to trade (integrates its market) with another country. Explain whether consumers in the original country are better off, and specifically how.

C) Assuming we start off in pre-trade equilibrium, what happens in the model when the fixed cost F decreases, in terms of number of firms, prices, and average cost? You can answer this question graphically or with algebra. Would you conclude that consumers are better off, worse off, or uncertain?

5. In the increasing returns to scale model, where firms can differ in terms of their marginal cost of production,

a) Explain how you would expect opening up to trade to affect the cutoff marginal cost. Explain also which firms win and which firms lose, specifically making reference to a diagram with the demand curve (and any changes to it) to help you explain your points.

b) Suppose that the rise of Chinese import competition leads to an increase in competition, but no corresponding increase in market size for firms. How would this affect the cutoff marginal cost, as well as the operating profits of different firms (with different marginal costs)? Is this consistent with Bloom, Draca, and Van Reenen (2016)’s findings that we discussed in Lecture 18?

What are the advantages and disadvantages of logrolling? How can logrolling for two pure public goods under majority rule prevent the attainment of efficient outcomes? Can you give an example where logrolling improves efficiency?

consider battle of networks game with 3 networks instead of 2. the payoff matrices represent market share (%) for each network depending on whether they show sit come or sports events. solve pure strategy.

N3-Sitcom

N3-Sports

1. Suppose that cars are an external economies of scale good. Imagine that the US has an initial (head start) advantage in car production. Mexico has not produced any cars, but is considering entering the car industry. Despite the US’s initial advantage in car production, Mexico is able to enter car production and eventually becomes the world’s only producer of cars. Draw a diagram with a forward falling supply curve for each country (and any other curves you may need) that illustrates this scenario, and briefly explain using words.

The coronavirus has affected not only public health, but business as well. Discuss the effects of the virus on marketing.

Assume M=$100, PX=$5 and PY =$10. Graph the budget constraint. Label the intercepts with their appropriate numbers and the slope as well

Now let’s assume income doubles so that M=$200. On the same space as above, graph the new budget constraint while appropriately labeling everything again.

Need help with third part:

Assume M=$100 again. But now, the price of good X increases from $5 to $10. Graph a 3rd budget constraint on the above graph and label everything.