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.

Housing policy: Housing subsidies vs. Cash offer

A low income household has a monthly income of 900, and is qualified to receive certain welfare from government in housing.

This household has the following utility function and faces the following market information:

U = X.Y where X is the housing consumption (sq.) while Y represents all other goods; Price of X (housing per square foot) is $0.5, and price of Y (all other goods) is normalized to be $1. Hint: MRS = Y/X

1.1. What will be the consumption bundle for this household when no subsides or welfare is offered? (hint: utility maximization given the budget constrain)

1.2. What will be the consumption bundle if this household receives a cash offer of 300 per month from government?

1.3. Instead of receiving cash offer, they are subsidized by a housing voucher program, which specifies their out-of-pocket cost for housing is $270 per month. To keep this household equally happy as in (1.2 receiving cash offer),

a. What will be their consumption bundle?

b. How much is the subsidy amount from government?

c. Compare to the cash offer, which program is more cost effective from tax payer’s perspective?

1. Why does the fact that world governments will be willing to start taking serious and powerful measures to confront the problem of global warming, within the next few years, seem unrealistic?

There is a single line in Towards the End of Poverty that states, “Take a bow, capitalism.” Why should “capitalism” take a bow in your opinion? Please support your answer.

Why are property rights the key for economic progress? Please support your answer.

What are the monetary policies in place at the start of the selected time period in relation to their effects on macroeconomic issues in 2000-2010?

1. Suppose stock market crashes. What kind of fiscal policy should the government use in the situation? Please draw AD-AS diagram illustrating this policy change. Indicate the starting equilibrium, as well as the effect of stock market crash and then subsequent use of fiscal policy.

1.

a. What are the motives for bank consolidations (mergers and acquisitions)?

b. Suppose Bank A buys Bank B and makes its subsidiary. Would shareholders of Bank A benefit from this acquisition? Does the answer depend on the motives for the purchase?