GENERAL BUSINESS COURSE QUESTION:

Joe and Jill were talking about the role played by the Federal Reserve System in the United States. Joe seemed to be quite well informed about the functions and activities of our central bank. "You see, Jill, the Fed is the main guardian of our nation's economic stability," Joe declared. "In America, we don't want inflation and we don't want recession. To stretch the situation just a bit, we are frightened, absolutely terrified, by thoughts of hyperinflation and depression. So, the Fed maintains the right to alter the situation and protect us from these two monsters. And you ask, how they do that? The answer is the discount rate. That is the device that the Federal Reserve System uses to keep us safe."

Jill was enjoying listening to her friend explain it all. Joe continued, "Now the discount rate is the interest rate that the twelve Federal Reserve Banks around the country charge their member banks on a loan. So, when the discount rate goes up, all interest rates tend to go up. And, happy to say, when interest rates go up all over America, this tends to slow down any inflationary tendencies." Jill asked, "Does the Fed have other tools for stopping inflation?" "No," said Joe.

2) Joe probably can't answer this question, but you can. What happens in the Fed's open market operations?

Total Demand for Private Goods vs Public Goods.

Consider the following individual demand functions:

Q₁ = 10 – P               Q₂ = 8 – P                  Q₃ = 7 - P

Rival & Excludable

1. Complete the following table assuming the product is rival and excludable:

WTP= willing to pay

Nonrival & Nonexcludable

2. If the above product becomes a public good, calculate the total demand for the product and complete the following table:

Public disagreements between Fed Chair Jerome Powel and President Trump could potentially

a.damage Fed ability to manage market confidence

b.cause unexpected, random inflation increases

c.lead to unexpected economic growth

d.all of the above

In 1923 during Prohibition, the market for 60 day fermented grape juice was legal, even though it often had up to 12% alcohol content. For buyers, a high quality bottle of juice was worth $6.65, while a low quality one was only worth $3.33. Sellers valued good bottles at $4.99 and bad ones at $1.96. If an uninformed buyer was willing to pay a price of exactly $4.99 for a bottle of juice, then what was the fraction of good ones?

Group of answer choices

0.35

0.50

0.55

0.65

Consider the 1923 market for grape juice one more time, but now assume that uninformed buyers figured 72% of the juice was good and the rest was bad. At the resulting market price, seller surplus from selling good juice is ____ and seller surplus from bad juice is _____.  

Group of answer choices

$0.73; $3.76

$0.73; $2.11

$1.35; $3.76

$1.35; $2.11

what is the effect of agriculture sector in corona virus

Both command-and-control and market oriented solutions have been used to address the pollution problem. What are the weaknesses or drawbacks of each approach?

In 1978, sellers of a good Ford Pinto valued them at $1,111 and valued a lemon at $765, while buyers valued good ones at $1,331, and lemons at $780. If an uninformed buyer figured 50% are each type, then the maximum price the buyer would pay for a Pinto would be _____.  

Group of answer choices

$1,035.55

$1,055.50

$1,065.55

$1,095.50

Consider the Pinto market again, but this time assume that uninformed buyers figured that fraction 0.45 are good ones, and the rest are bad. In this case, the price the buyer is willing to pay is _____ and this will _____ an adverse selection problem.  

Group of answer choices

$1,033.44; avoid

$1,033.44; generate

$1,027.95; avoid

$1,027.95; generate

c

onsider the used Pinto market one last time. Under imperfect information, to avoid adverse selection, the minimum percentage of good types necessary to avoid adverse selection is?

Group of answer choices

51.25%

55.5%

57.6%

60.1%

Suppose that a small town has six burger shops whose respective shares of the local market are (as percentages of all hamburgers sold): 26%, 20%, 18%, 14%, 12%, 10%,

a) What is the four-firm concentration ratio of the hamburger industry and what is the Hirchmann Herfindahl Index (HHI) for the hamburger industry in this town?                                                                      

b) Assume that the largest producer now purchases the third largest firm (based market share) so that this new combined firm has the same market share as old firm 1 and old firm 3 combined. Compute the new four-firm concentration ratio and to the new HHI?

What is the logic of domination and how is it used to dominate women, non-white peoples and the environment according to Warren?

Kunra is located in Boston and produces cars. In the course of car production, Kunra releases pollution as a negative externality into the atmosphere of Boston. Some of the pollution-related problems include skin cancer, contamination of drinking water, breathing epidemics, birth defects, and offensive odor. Sadly, Kunra does not do anything to bear the costs associated with the health and ecological problems Boston residents suffer. Interestingly, Kunra believes that Boston residents do not know about the problems and then leaves Boston residents to pay for the health and ecological problems they suffer from the pollution generated in the production of cars. What a rip-off against Boston residents!!! Kunra smiles home with huge profits. Kunra’s customers outside Boston feel satisfied with Kunra’s cars and organize events to praise the incredible quality of Kunra’s cars. Alas, Boston residents apparently turn out to be victims in the process of production and consumption of Kunra’s cars.

Suppose that you are a public administrator in Boston’s City Government, have trained in Economics for Public Administrators from Clark Atlanta University, and are working with the following marginal benefits and costs for Kunra’s car production, where Q is thousands of cars and P is price per car:

MPB (Marginal Private Benefit) = 120- 0.6Q (benefits to individual consumers of Kunra’s cars).

MPC (Marginal Private Cost) = 20 + 0.4Q (costs of producing cars by Kunra).

MEB (Marginal External Benefit) = 0 (an external benefit is a positive externality: car production benefits to Boston may include a healthy environment and healthy residents in Boston. In the current context, external benefits are zero).

MEC (Marginal External Cost) = 0.25Q (an external cost is a negative externality: health and ecological problems associated with the pollution generated by Kunra that affect Boston’s residents and environment).

Find the competitive equilibrium, Qc and Pc; the efficient equilibrium, Qe and Pe; and show the competitive equilibrium and the efficient equilibrium in the same graph that is properly labeled.

The following functions describe the behavior of major macroeconomic variables in an economy where prices are fixed: C = 400 + 0.9Yd I = 270 – 2000r G = 70 T = -40 + 0.2Y X = 45 IM = 41 + 0.12Y r=3% Y* = 1,725

c. Calculate the cyclical deficit/surplus. d. Suppose the government wants to close the recessionary gap and move us back to Y* using changes in G. Calculate the change in G necessary to close the gap. Is this an increase or decrease in G? e. Suppose instead the Federal Reserve wants to close the recessionary gap and move us back to Y* using changes in the interest rate. Calculate the change in the interest rate that will be necessary to close the gap. Is this an increase or decrease in the interest rate?

dentify the likely prospects for the products or services by the market-leading company in the state of North Carolina with reference to any industry that interest you the most.