Consider the effects of inflation in an economy composed of only two people: Rajiv, a bean farmer, and Simone, a rice farmer. Rajiv and Simone both always consume equal amounts of rice and beans. In 2016 the price of beans was $5, and the price of rice was $3.

Suppose that in 2017 the price of beans was $10 and the price of rice was $6.

Inflation was ________%

.

Indicate whether Rajiv and Simone were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017 the price of beans was $7.50 and the price of rice was $6.

In this case, inflation was __________%

.

Indicate whether Rajiv and Simone were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017, the price of beans was $1.50 and the price of rice was $6.

In this case, inflation was ___________%

.

Indicate whether Rajiv and Simone were better off, worse off, or unaffected by the changes in prices.

What matters more to Rajiv and Simone?

The overall inflation rate OR The relative price of rice and beans

What is the difference between optimizing and satisficing? What firms do in reality?

In your own words describe the process of change for businesses (4 stage model) and explain where in that process the firm you work at would be?

After reading the short article "How a Presidential Election Year Can Impact the Economy" by Jennifer Stinnett, answer the following questions.

• The Stinnett article is fairly high level. What have you learned about interest rates and the fixed securities markets that can provide evidence to support or refute the claims made by Ms. Stinnett?
• This article was posted in anticipation of the 2016 Presidential election. What has happened in the intervening time, and in the current election cycle, that influences your interpretation of this article?  

The article is very short and can be found through a quick google search of the title.

1. Describe how Coca Cola company currently prices its main products or services. Is this the best method? Why or why not?

i. Comment on the traditional approaches of skimming and penetrating that would apply to Coca Cola.

2. Identify Coca Cola's primary marketing channel's strengths and weaknesses?

i. Include an analysis of where you think Coca Cola can cut costs while also providing more value from manufacturing to final retail.

3. How do Global Brands Compete? What is the main globalization opportunity or challenge impacting Coca Cola company? What must be done to strengthen the global position of Coca Cola brand?

Can anyone elaborate on why if current trends continue, China may emerge as the world’s largest economy by 2020? Discuss the possible implications for such a development for (a) the world trading system; (b) the world monetary system; (c) the business strategy of today’s European and U.S.-based global corporations; and (d) global commodity prices.

Can you please reference scholarly articles that support why and how? I am trying to understand the specifics on why this is a relevant question at this time.

Consider the impact of economic inequality for politics and society. What are some of the methods used to assess inequality? Prescribe a policy or set of policies that you think could be the most effective at ameliorating inequality, and why.

Power distance refers to the degree to which the culture believes that institutional and organizational power should be distributed unequally and whether the decisions of the power holders should be challenged or accepted. Which countries have the lowest power distance and the highest power distance? Post a link to your source for this information and how power distance in these countries reflects each country’s approach to economic, political, and social equality.

Two polluters, A and B, have marginal abatement cost functions given by MACA=28- 2EA and MACB= 32- 2EB. (a) If the goal is to reduce the combined/total emissions from the two firms to 20 units in a cost-effective manner, then how should emission standards be set? (b) Now imagine that the two polluters are participating in a TDP/TEP market( transferable emission permits market) along with many other polluters. If the price of a permit is $10/unit in the market and Polluter A is given 12 permits by the government regulator initially, then how many permits is it likely to buy or sell? What amount of net benefits can it expect from the trade? [ Parts (a) and (b) aren't related to each other]

1. There are various ways in which presidents can set the agenda, such as the State of the Union address, bully pulpit, etc. Identify an example of a president setting the agenda. Were they successful? Why or why not?

Coal-fired power plants are known to release a lot of pollutants such as sulphur dioxide, carbon monoxide, mercury, ashes, etc.
(i) Does it matter to a coal-fired power plant whether there is a liability law or not? If so, explain in what ways.
(ii) Is there is any incentive to innovate (i.e. adopt new abatement technology) under a liability law for a polluter? Explain.

Covid 19 is a crisis primarily caused by biology, but it has resulted in economies shutting down worldwide. The US government has already introduced a stimulus package close to $2 trillion, about one-tenth of total GDP and is working on another stimulus. The Federal Reserve has lowered interest rates and is more involved in private lending than ever before. The European Union, Japanese goernment, and others are spending hundreds of billions to keep the economy afloat. Do you believe a financial crisis is a serious risk? What are the risks of these government actions?

1. It is a common misconception that the incidence of a tax (i.e., how the burden of the tax is actually divided between consumers and producers) depends on who is legally responsible for paying the tax to the government.
   1. [2 points] Briefly explain why the legal assignment of the tax does not determine the real incidence of the tax. For example, if the government collects the tax entirely from producers (it does not collect any taxes from consumers), how do consumers end up bearing part of the burden of the tax?

2. [2 points] What actually determines the shares of the tax ultimately paid by consumers and by producers?

2. [2 points] If the price of an inferior good increases, explain how we should expect the quantity demanded to change (increase or decrease) due to the income effect.

3. The director of the Springfield Natural History Museum is considering renovating the museum to make it less susceptible to earthquake damage. The director believes that there is a 15% chance that the museum will experience an earthquake, and that such an earthquake would cause $20 million in damage to the museum if it is not renovated. If the museum is renovated, an earthquake would cause no damage. Renovating the museum would cost $2.5 million and would have no benefits other than providing earthquake protection. [Note: Remember that the monetary amounts discussed here are losses, not gains, so smaller amounts are better than larger amounts.]
   1. [2 points] What is the expected value of the loss from earthquake damage if the museum is not renovated?

2. [4 points] What can we say about whether or not the museum director should renovate the museum if they are risk-averse? If they are risk-loving?

why do we need to study Economics? What was the major economic decisions you made in the past two years?

Consider the Battle of the Sexes game:

1. (1.5 point) Give the pure-strategy Nash equilibrium or equilibria, if any.

2. (6 points) Compute the mixed-strategy Nash equilibrium with p being the probability of boxing for Sophia q being the probability of boxing for Jim. As part of your answer, show how you calculate the best responses for each player by calculating the expected value of each strategy:

1. • Sophia:
     • EV(Boxing)=
     • EV(Opera)=
     • EV(Boxing)>EV(Opera) if
     • EV(Opera)>EV(Boxing) if
   • Jim:
     • EV(Boxing)=
     • EV(Opera)=
     • EV(Boxing)>EV(Opera) if
     • EV(Opera)>EV(Boxing) if

3. (2 points) Draw the best-response functions diagram on a (p, q) graph. Clearly label the best response of Jim by BRJ and the best response of Sophia by BRS.

4. (1.5 points) Show where these best response intersect and indicate at each intersection whether it defines a pure or mixed strategy equilibrium.