1a. Graph the long run position of a firm in monopolistic competition.

1b. Graph the typical monopolistic long run situation.

1c. Compare the two graphs and explain how they are similar.

Federal welfare programs expanded dramatically during President Johnson’s War on Poverty, continuing a prominent government role in welfare since Franklin D. Roosevelt’s New Deal. In 1997, the Aid to Families with Dependent Children (AFDC) was replaced by Temporary Assistance for Needy Families (TANF). Identify the major changes from AFDC to TANF. How does the implementation of block grants introduce considerable variation among the states? Explain the relative advantages and disadvantages of the transition from AFDC to TANF.

3. Suppose that a closed economy could be described by the following set of equations: Production Function: Y = 120K1/3 L2/3

̅̅ Factors of production: K=125; L=1000

̅̅ Government Behavior: G= 3000; T = 2500

Consumption Behavior: C = 400 + 0.8(Y –T)
Investment Behavior: I = 16500 – 1000r
a. Calculate the equilibrium level of output (Y)
b. Prove that the production function has the property of constant returns to scale.

c. Calculate the marginal product of labor (MPL)

d) Calculate the equilibrium levels of the following variables

(i) Consumption (C)

(ii) Private Savings

(iii) Public Savings

(iv) National Savings (S)

(v) real interest rate (r)

explain how the Central Bank of Venezuela could adjust its foreign exchange reserves to try to push the black-market bolivar-dollar exchange rate closer to the official fixed exchange rate?

In August 2018, the U.S. Department of Agriculture (USDA) announced the decision to purchase 11 to 13 million gallons of milk from dairy farmers, amounting to $50 million in total.

With the above information, which do you think was occurring in the dairy market that prompted USDA to make the purchase--a shortage or a surplus? Which person or group of people will USDA's purchase help? And finally do you think the purchase will impact the dairy market in terms of price, supply, and/or demand?

 How does variety lead to paralysis of action?

Consider a market consisting of several small pulp & paper mills operating in the South-east. These firms discharge chlorine and other waste products into nearby rivers and streams. The rivers and streams are not privately owned, and the mills’ discharges are currently unregulated by the EPA or by the states’ environmental agencies. The demand for paper produced by the mills in this market is P = 800 - 0.5Q. The marginal cost of producing paper in this market is MC = 20 + 0.3Q, where P and MC are expressed in dollars, and Q is expressed in tons of pulp and paper.

a. Determine this market’s equilibrium price and quantity, total revenue, marginal cost, consumer and producer surplus.

b. University researchers estimate that chlorine emissions from the industry's production impose costs, unaccounted for the industry or the market in which it operates, equal to P = 0.05Q. Determine the market’s efficient equilibrium price and quantity when all costs are accounted for.

c. The researchers then suggest that a tax, equal to the unaccounted for costs, be imposed on the production of pulp & paper in this market. What is the dollar amount of the tax? How much in revenue would the government collect? Would the market be inefficient with the tax? Explain (briefly and concisely) your answer.

Is population growth an impediment for economic development? Discuss the arguments in favour and against.

Exercise goals: Be able to solve the profit maximization problem of a monopolist with third-degree price discrimination.
Understand the differences between 3DPD and single-pricing. You own a monopoly that produces cars to be sold in two countries: Freedonia and Sylvania. Demand for cars in Freedonia is given by PF = 16,000-20Q_F, while demand in Sylvania is given by P_S = 20, 000 - 10QS. You own a single plant in Sylvania that produces cars for both countries. Your cost function is C (Q) = 8, 000Q, where Q = Q_F + Q_S.

1. (1 point) Initially, these two countries have a peaceful relationship, and free trade exists between them, therefore you can only charge a single price between the two countries. What price do you set? How much profit do you collect? [Hint: it may be easier to solve this maximization problem in terms of P. To do so, you can first obtain the demand functions (i.e. Q(P) = . . .), and then write the cost function in terms of P using the demand functions]

2. (1 point) How much consumer surplus is generated in each country?

3. (1 points) The Freedonian government finds out that Sylvania is secretly plotting to invade Freedonia. This discovery leads to an interruption in free trade between the two countries. That’s good news for you: it means you can now sell cars in Freedonia at a different price than in Sylvania. However, in order to do so, you have to build a factory in Freedonia as well. Suppose that you can build a factory for free (the Freedonian government is giving you a generous handout because they like your cars). The plants are identical, so you have the same cost function in both countries (C (Q) = 8, 000Q). What prices do you set? How much profit do you collect?

4. (1 point) How much consumer surplus is generated for each country in this new scenario? Comment on whether you think 3DPD is good or bad for society as a whole (i.e. Freedonia + Sylvania) in this case.

5. (1 point) Suppose that the cost of building a factory is 300,000. Does it make sense for the Freedonian government to subsidize the plant? Why or why not? [When answering this question, assume that the Freedonian government only cares about the well-being of its citizens]

The current financial meltdown and mortgage crisis triggered some assertions by some people in some quarters that excessive and uncontrollable greed associated by capitalism is the reason for this crisis. Do you think Karl Marx’s conflict theory supports this point? If so, why?

In the 1990 Clean Air Act Amendments, Congress and the EPA rely on the automobile industry to develop a cleaner automobile. At the same time, the government imposes a relatively minor federal tax on gasoline. a. Do you see any problem with the implicit signals the federal government is sending to American auto manufacturers and to American car drivers through these policies? Briefly discuss. b. Formulate a hypothetical economic policy to motivate automobile manufacturers to advance the technology of cleaner motor vehicles.

“It is better to pay regular price than to stand in a long line for a free item.” Discuss the statement using three (3) core principles of economics (with applicable examples) to support your views.

What is civil war pension? how it work for veterans and their family members. What are the significant impact on veterans and their family members?

The mean cost of domestic airfares in the United States rose to an all-time high of $375 per ticket. Airfares were based on the total ticket value, which consisted of the price charged by the airlines plus any additional taxes and fees. Assume domestic airfares are normally distributed with a standard deviation of $115. Use Table 1 in Appendix B.

a. What is the probability that a domestic airfare is $560 or more (to 4 decimals)?

b. What is the probability that a domestic airfare is $240 or less (to 4 decimals)?

c. What if the probability that a domestic airfare is between $320 and $480 (to 4 decimals)?

d. What is the cost for the 5% highest domestic airfares? (rounded to nearest dollar)