After viewing the video clip from Cool Hand Luke, first consider how marginal benefits and marginal costs fit in to Luke’s decision, and how the concept of diminishing marginal utility is at work as Luke eats more and more eggs. What is driving his marginal benefits to continue to exceed his marginal cost? Consider how Luke’s decision would change if he had to actually pay for each egg he eats. How would this affect his choice to continue eating? Consider the concept of marginal utility per dollar spent (i.e. MU/p) and how it affects the consumption decisions we make. Have you ever had a time where you actually bought your second choice rather than your first choice? That is, can you think of a time where it wasn't only about marginal utility for you, but about marginal utility per dollar spent? Explain.

1.) State the Ricardian equivalence theorem and explain its significance.

2. Lyuba has preferences over peonies (p) and tulips (t). The following list shows all feasible bundles that Lyuba can consume in a month:

   A = (pA,tA) = (1,3), B = (pB,tB) = (3,1), C = (pB,tB) = (2,2).
   If Lyubas preferences are given by: A is indifferent to B, C is strictly preferred to A

   and C is strictly preferred to B, then:

   1. (a) A function that represents Lyuba’s preferences is U(p,t)=3p+t.

   2. (b) A function that represents Lyuba’s preferences is U(p,t)=p+t.

   3. (c) There exists a utility function different from the ones mentioned above that rep- resents Lyuba’s preferences.

   4. (d) None of the above.

An economy has a cobb-douglas production function:

Y=K^(a)(LE)^(1-a)

The economy has a capital share of 1/3, a saving rate of 24%, a depreciation rate of 3%, and a rate of population growth of 2%, and a rate of labor-augmenting technological change of 1%. It is in steady state.

a) At what rates do total output, output per worker, and output per effective worker grow?

b) solve for capital per effective worker, output per effective worker, and the marginal product of capital.

c) does the economy have more or less capital than at the Golden Rule steady state? how do you know? To achieve the golden rule steady state, does the saving rate need to increase or decrease?

d) suppose the change in the saving rate you described in part c occurs. during the transition to the golden rule steady state, will the growth rate of output per worker be higher or lower than the rate you derived in part a? after the economy reaches its new steady state, will the growth rate of output per worker be higher or lower than the rate you derived in part a? explain your answers.

Is AIG too big to fail? 250 words

List at least three breakdowns in communication that can occur to result in the receiver not obtaining the desired message from the sender.

Carefully explain the implications (in terms of efficiency) of third degree price discrimination in a market serviced by a monopoly

Carefully explain the implications (in terms of efficiency) of the government regulating the price of monopoly

Please read the forum instructions above before you post for the forum 1. By now you have learned some fundamentals of economics. How can you apply economic thinking (what you have learned so far) in your daily life? Please give a unique example to illustrate your application. Before you post your own example please read others postings to avoid duplicate posting. Your personal statement is due by the end of Wednesday.

Lesson learn so far

Learning Objectives

1. Identify the concepts of scarcity and economics.

2. Identify the three categories of resources

3. Distinguish between "macro" and "micro."

4. Distinguish between "positive" and "normative" economic analysis.

1. Identify the opportunity cost of an action.
2. Generate the graph of a production possibilities curve for any two commodities.
3. Determine the application of the the principle of marginal cost and benefit for decision making.
4. Given a graph of a production possibilities curve, determine the opportunity cost for producing each commodity.
5. Given a graph of a production possibilities curve, identify a combination of outputs as inefficient, efficient, feasible, or infeasible.
6. Identify the law of increasing opportunity cost and reasons for its existence.
7. Identify different type of economic growth in the context of a production possibilities model
8. Apply economic thinking in our daily life.
9. Distinguish between a change in quantity demanded (supplied) from a change in demand (supply).
10. Identify the factors that shift the demand and supply curves.
11. Given information on supply and demand in a market, graphically determine the equilibrium price and quantity of a good.
12. Given information on supply and demand in a market, identify a surplus and a shortageSubject
13. 1. EC101 Chapter 1,2,3 and4

Describe In 300 words a situation or incident from the 21st century that indicates that Adam Smith's social and economic theories apply in today's world. Be specific. please type

Provide three predictions of items you think will happen in Europe in the next 10 years. Why you think these items will happen?

1. Concepts/Definitions

Neoclassical

Heterodox

Social Institutions

Social Classes

Land

Labor

Capital

Direct/Inverse Relationship

Fallacy of Composition

Paradox of Thrift

GDP

Feudalism

Capitalism

Socialism

Monetary Production

Nominal/real

Business cycle

Recession, Peak, Trough   

Unemployment (UE) Rate

Frictional/Structural/Cyclical UE

Full Employment (heterodox/neoclassical)

Consumer Price Index

Imports/Exports

Inflation/Deflation

Disinflation

Demand pull/Cost Push

Say’s Law

Civilian Labor Force

Nominal/Real Rate of Interest

Stocks/Flows

Which one of these quantities is positively correlated with the total interest paid on a mortgage? (Note: Total interest is the sum of all interest payments throughout the life of a mortgage.)

(A) Amortization period (B) Amount of down payment (C) Amount of a yearly prepayment (also called lump sum) (D) Payment frequency (number of payments per year)

1) Define and explain fiscal policies.

2) Explain what the government budget is and what a budget surplus, budget deficit, and government debt are.

3) Define and explain the relationship between fiscal policies and the government budget.

How do planetary boundaries affect our approach to Sustainable Development? As much information as possible would be great. Welcome for all opinions and inputs.

A barber shop offers haircuts to both students and faculty. Student demand for haircuts is given by pS(QS) = 24− 1QS. Faculty demand for haircuts is given by pF(QF) = 24− 1QF.

Students have more hair than professors (even the young professors), and longer hair costs more to cut. Reflecting this fact, the barber shop’s total costs are

C(QS,QF)=16QS +10QF
Suppose first that the barber shop can engage in perfect price discrimination.

1. (3 pts.) How many students get haircuts (Q∗S )? How many faculty get haircuts (Q∗F )? How much profit will the barber shop make?

2. (3 pts.) Under perfect price discrimination, is each of these statements true or false? Briefly explain your reasoning.

   i. Every faculty member with positive willingness to pay ends up getting a haircut. ii. Among the people who get haircuts, students pay more than faculty on average.

   iii. The cheapest haircut sold is sold to a faculty member

Now suppose that the barbershop cannot engage in personalized pricing. However, it is able to offer one price for students and a different price for faculty.

c. (3 pts.) Find the monopoly’s profit-maximizing prices p∗S and p∗F under group price discrimination. Which group is charged a bigger price markup?

Upset about discriminatory prices, student groups organize protests against the barber shop, using the catchy slogan “It’s unfair / to tax our hair!” The protests go viral, and the barber shop reluctantly agrees to charge everybody the same price, regardless of cost.

d. (3 pts.) Compute the market demand curve Q(p), then write the barber shop’s profits as a function of p. (Be careful with the costs!) What price will the barber shop charge?