Discuss and illustrate graphically the difference between a change in quantity supplied and a change in supply.

8.         List and discuss the factors that shift supply. Illustrate graphically.

9.         Define, discuss and illustrate graphically equilibrium in the olive market. Define and illustrate graphically excess demand and excess supply.

1. Consider the following game. Player 1’s payoffs are listed first:

1. Imagine that player 1 makes a decision first and Player 2 makes a decision after observing player 1’s choice. What is the subgame-perfect equilibrium of this game?

2. Imagine that player 2 makes a decision first and Player 1 makes a decision after observing player 2’s choice. What is the subgame-perfect equilibrium of this game?

3. Are your answers to (a) and (b) above the same or different? Explain.

1. Two friends are deciding where to go for dinner. There are three choices, which we label A, B, and C. Max prefers A to B to C. Sally prefers B to A to C. To decide which restaurant to go to, the friends adopt the following procedure:

                                First, Max eliminates one of three choices.

Then, Sally decides among the two remaining choices.

Thus, Max has three strategies (eliminate A, eliminate B, and eliminate C). For each of those strategies, Sally has two choices (choose among the two remaining).

1. Write down the extensive form (game tree) to represent this game.

2. If Max acts non-strategically, and makes a decision in the first period to eliminate his least desirable choice, what will the final decision be?

There is much discussion about the likely structure and direction of international trade once the Covid-19 crisis is over. One view is that demand for Chinese products, and thus exports of China to the world will decline. Explain the impact of this decline on welfare (please specify whose welfare) in the context of (i.e. using the assumptions and predictions of) (a) the standard model and (b) a model where there are external economies of scale in the production of products that China exports.  

In your own words (you cannot paraphrase), explain the adverse selection problem that car insurance companies face and how they deal with it. Finally, in few words explain whether insurance companies should only insure safe drivers.

Provide an example of positive externality and an example of negative externality that would justify protectionism. Discuss how protectionism can help reach that goal. If you can think of a better policy to reach the goal desired through protectionism, please explain that policy and why it would be preferable

Explain in your own words why banks exist (again you cannot paraphrase). Be as specific as you can. Think about what problems they solve.

In the United States some critics of the World Trade Organization say that it has failed to protect US interests. Others disagree. Given that high technology products and agricultural products are important export items for the US, which WTO agreements could have been used to protect US interests in these areas, and in what way?

The flow of globalization changed backward to old days ; how ?

Distinguish between Walras’s general equilibrium approach and Marshall’s partial equilibrium approach. ( 2 page answer)

a) Explain the advantages and disadvantages of exchange rate targeting.

b) Supposing that Malaysia is adopting the fixed exchange rate system. By assuming that the Purchasing Power Parity holds, and based on IS-LM and AD-AS diagrams, explain what would happen to relative prices if the government increases or decreases its expenditure.

c) Differentiate between a fixed and flexible exchange rate.

d) Despite the disadvantages, why is fixed exchange rate preferred?

Explain the effects of a tax on producers on the equilibrium price and quantity in a competitive market. Comment on the effect on surpluses and the gains from trade.

“Policymakers are in favor of using the flexible exchange rate system compare with the fixed exchange rate system to attain both the internal balance and external balance of the economy.” Explain.

Consider the market for DVD players and HDTVs (high-definition televisions). A firm can produce DVD players at an average cost of $20 each, or HDTVs at a cost of $150 each. Which product should this firm produce if the price of DVD players is $15 and the price of HDTVs is $200? Why? Explain what you would expect other firms in both the markets for DVD players and HDTVs to do. Assume both markets are competitive.