There are many policy proposals aimed at curtailing the high cost of pharmaceuticals and/or encouraging innovation. Briefly analyze the costs and benefits of the following policy proposals: a. The government uses an auction to estimate the private value of patents and then offers to buy out patents at this private value. Most patents purchased would be placed in the public domain. b. The government offers a $5 billion prize to the first drug company that develops a cure for Alzheimer’s disease. c. In order to control the rising costs of new drugs, the government puts a cap on drug prices at $10,000 per month.

1) Which of the following is likely to occur as the result of the law of diminishing marginal utility?

a) Petra's utility from her second apple was less than her satisfaction from her first orange.

b) Hudson enjoyed his second slice of pizza more than his first.

c) Sabine's utility from her first granola bar is greater than Rachel's utility from her second granola bar.

d) Wesley enjoyed his second bottle of iced tea less than his first bottle, other things constant.

2) A consumer's utility-maximizing combination of goods is given by the bundle that corresponds to the point on

a) the indifference curve that intersects the horizontal axis.

b) the indifference curve that intersects the vertical axis.

c) an indifference curve that is tangent to the budget constraint.

d) the budget constraint where it intersects one of the axes.

3) Which of the following is not a property of indifference curves?

a) Indifference curves never cross.

b) Indifference curves have a concave shape.

c) Indifference curves slope downward.

d) The farther away from the origin, the higher utility.

e) All of the above are properties of indifference curves.

Note* Please only attempt this question if you know about it. I have seen a sample and it can be calculated without the depreciation amount.

Question: Introduction to Macroeconomics

1. The table given below contains some macroeconomic data for Economy Northland.

Using the information from the table above and your knowledge, calculate the gross domestic product at market price for Economy Northland with the following approaches.

1. Using expenditure approach if it was a closed economy
2. Using expenditure approach if it was an open economy.                                                 
3. Using income approach.                                                                                                   

Using the quantity Theory of Money formula, suppose that in 2020: Money supply = $50 Billion;  Nominal GDP = $1.0 Trillion; and Real GDP = $500 Billion.

a). Calculate the Price Level (P) and Velocity of Circulation (V) .  Show your calculations for a full mark.

b) Suppose the velocity of circulation is constant (the one you calculated in (a), and the economy’s output of goods and services increases by 5% annually. Calculate Nominal GDP (or what will happen to nominal GDP) and the Price Level (P) in 2021 if the Bank of Canada keeps the money supply in 2020 constant or the same?

c). Calculate or What level of money supply should the Bank of Canada set next year (2021) if it wants to keep the price level stable (hint: based on a 5% increase in real GDP).

4. Indicate whether each of the following statements is true or false, and explain why.
a. A competitive firm that is incurring a loss should immediately cease operations.
b. A pure monopoly does not have to worry about suffering losses because it has the power to set its prices at any level it desires.
c. In the long run, firms operating in perfect competition and monopolistic competition will tend to earn normal profits.
d. Assuming a linear demand curve, a firm that wants to maximize its revenue will charge a lower price than a firm that wants to maximize its profits.
e. In an oligopoly, the firm that has the largest market share will also be the price leader.
f. The demand curve facing a firm in a monopolistically competitive market is more elastic than one facing a pure monopoly.

1. Why have some experts suggested a tax on sugar-sweetened beverages as a way of reducing obesity among teenagers? What factors be involved in determining the amount by which obesity is reduced?

Please type it ,thanks!

Directions: For each question, show what happens to Equilibrium price (P) and quantity (Q) using supply-demand analysis. Clearly state your conclusion (e.g., "equilibrium price increases, while equilibrium quantity decreases" using the short-hand " ^P and vQ"). Be sure to complete and correctly label your graphs.

Question 4:

Part A:

Suppose government taxes coal fire powered plants a certain amount per ton of coal burned to generate electricity. Everything else held constant, what will happen to the equilibrium price and quantity of electricity generated by natural gas plants if coal and natural gas are consumption substitute?

-> Insert graph

Conclusion:

Part B:

Suppose that an economic downturn realists in the decrease in average consumer income. Everything else held constant, what will happen to the equilibrium price and quantity of airplane travel (assuming air travel is a normal good)?

-> Insert graph

Conclusion:

Please read the following paragraph. I would like you to explain the underlined sentences in economic terms

David Speer is chief executive of Illinois Toolworks, which has 60,000 employees worldwide in more than 800 business units and $14 billion in sales. He said an additional burst of fiscal stimulus from Washington might help boost economic growth for a period of months. But that is unlikely to affect his decisions about hiring and expansion, which Speer said are based on expectations for sales over years to come, not just the immediate future.

As long as U.S. consumers remain deeply strained, he is unlikely to undertake aggressive expansion.

More fiscal stimulus "might help make things a little better for a couple of quarters, but I'm not sure it would get at the underlying economic issue," Speer said. "The core question is: How do you get consumers back on their feet. We need growth in a sustainable way, not another Band-Aid."

Nor is it clear that new Fed action, such as steps to try to lower long-term interest rates and encourage investment, would prompt him to expand.

For large companies such as Illinois Tool Works, the price of borrowed money isn't the problem. The company had $1.3 billion in cash on its balance sheet at the end of June, up from $743 million at the end of 2008. Lower interest rates wouldn't make much of a difference, either.

"I could borrow $2 billion tomorrow for 3 1/2 percent," said Speer. "But what am I going to do with it?"

Speer is coming to terms with a new economic reality. After an extended economic boom, the nation is less than three years into the process of working out the excesses of that period.

"It took us a decade to get in the ditch we are in," Speer said. "There isn't going to be instant gratification to get us out of it. We're going to have to get used to a lower growth economy, and that is going to be a big adjustment for all of us."

1. In one year you meet 104 people who are each unemployed for one week (and one week only), and twelve people who are each unemployed for the whole year. Each person who was unemployed for only one week was unemployed during the same week with only one other person who was unemployed for only one week. What percent of the unemployed people that you observe in the year are long-term unemployed?

A. 10.3% B. 11.5% C. 85.7% D. 88.5% E. 89.7%

2. Which of the following statements about the labor market is (are) correct?

(x) The supply curve reflects job seekers and the demand curve reflects the jobs that are available.

(y) Workers determine the demand for labor, and firms determine the supply of labor.

(z) The minimum wage is an example of a price floor because the government has mandated a minimum price of labor.

A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (z) only

3. The imposition of a minimum wage that is set above the equilibrium wage in the unskilled labor market will

A. cause the equilibrium wage in the market to rise.

B. cause some workers to get a raise and some workers to lose their job.

C. make every worker who is earning a wage below the minimum better off.

D. make workers earning more than the minimum wage worse off.

E. make it possible for every worker who wants a job at the new minimum wage to find one.

2. In a closed economy, how would each of the following events affect bond price and market interest rate? Use the figures of both bond market and market of loanable funds to illustrate the changes to the interest rates.

A. The expected rate of inflation decreases.

B. The federal government runs a budget deficit.

Does supply and demand laws apply to labor, capital, and land? Why or why not?

Suppose the own price elasticity of demand for good X is -3, its income elasticity is 1, its advertising elasticity is 2, and the cross-price elasticity of demand between it and good Y is -4. Determine how much the consumption of this good will change if:

Instructions: Enter your responses as percentages. Include a minus (-) sign for all negative answers.

a. The price of good X decreases by 5 percent.

percent

b. The price of good Y increases by 8 percent.

percent

c. Advertising decreases by 4 percent.

percent

d. Income increases by 4 percent.

percent

What factors explain the timing of the agricultural transition (neolithic)? What consequences did the agricultural transition have for inequality, health, and long-run economic development?

In 2007, there were many people in Sri Lanka who have an opinion that the government should interfere more in the
economy as there were some economic problems. The reason was the Sri Lankan citizens are not happy with the
future of some of their private car companies like Maruthi and Daewoo. The Sri Lankan car brands were victims of
low domestic demand. Most of the sales of these cars were made inside the country. Some economists wanted the
jobs of the people to be saved. Some other people wanted the government to give more freedom to the companies
and required no need to enter in the problems faced by the company. They believed that the freedom of the companies
will be lost. The Sri Lankan government has seen itself as a referee in market issues and has avoided entry in to
market issues in the past. The Sri Lankan government also is the owner of some companies in the country. Some
economists were of the opinion that the government interference will regulate anti-competitive behavior. However,
in the recession of 2009, when the economy was shrinking, the government was forced to spend more to stimulate
demand and had to intervene heavily to save the banking sector from collapse. The government also had to offer
financial support to businesses to keep them alive.
Based

2. Imagine that you are the finance minister of Sri Lanka. What would you do in this situation to solve the country’s economic problems? (words 250)