1. As reported in the Wall Street Journal in November 2016, the 11 countries that make up the oil cartel OPEC agreed to each cut their oil production over 2017 by 2% in an effort to raise the price of oil and increase their profits (since the demand for oil is inelastic). Let’s use a simplified one-off game with only two countries (Iran and Saudi Arabia) to analyze the strategic interaction between the countries and the likely impact on oil revenues of their agreement. Suppose that each country can produce either a high or a low quantity of oil:

• If both countries reduce oil production to the low quantity, Iran earns 86 billion and Saudi Arabia earns 126 billion in profits.
• If Iran produces the high quantity and Saudi Arabia the other the low quantity, Iran earns 142 billion in profits and Saudi Arabia loses 29 billion.
• If Saudi Arabia produces the high quantity and Iran the other the low quantity, Saudi Arabia earns 202 billion in profits and Iran loses 17 billion.   
• If both produce the high quantity Iran earns profits of 5 billion and Saudi Arabia earns 12 billion in profits.

1. Fill in the payoff matrix for this game. Be sure to carefully label each country’s strategies.

2. Identify each country’s dominant strategy (if there is one) and provide a 1-2 sentence explanation supporting your choice(s). What is this game’s Nash equilibrium

3. Is there an outcome that would be better for both countries than the Nash equilibrium? If so, could it be achieved if this was a repeated game rather than a one-off game as above? Support your answer with no more than two sentences.

The purpose of this assignment is to practice economic theories related to saving, investment, and the financial system

Are Future Budget Deficits a Threat to the​ Economy?

Congress gives the Congressional Budget Office​ (CBO) the responsibility of estimating the effects of federal spending and taxing policies on the economy. An Associated Press news story on a CBO report noted that federal budget deficits in the United States were likely to increase in future years. According to the​ CBO, these higher deficits might​ "pose a threat to the economy by crowding out business investment and threatening a spike in interest​ rates."

​(Source: Andrew​ Taylor, "CBO: Deficits to Drift Lower on Lower Health​ Costs," Associated​ Press, April​ 14, 2014.)

a. What did the CBO mean by a​ "spike in interest​ rates"? Why might increased federal budget deficits lead to a spike in interest​ rates? Illustrate your answer with a graph.

b. Is the spike in interest rates connected to crowding

​out? Why might crowding out be considered a threat to the​ economy?

1. Leather Feet is one of many firms that is a supplier in the market for shoes. Leather Feet’s shoes are considered to be high-end and are known for a stylistic sensibility that sets them apart from other producers’ shoes. Many firms have entered and exited the market over the past few decades but none produces exactly the same shoes as Leather Feet.
   1. What kind of market structure best describes this shoe market? Support your answer with the relevant characteristics.

2. Assume that Leather Feet is currently earning positive short-run economic profits. On a correctly labeled diagram, show Leather Feet profit-maximizing output and price, as well as the area representing profits.

3. What happens to Leather Feet’s price, output, and profit in the long-run? Explain this change in less than two sentences and illustrate it on a new diagram.

4. Suppose that over time stylistic differences among shoe brands become more important to consumers. How would this change in attitudes affect the firm’s price elasticity of demand?

5. At the profit maximizing price you identified in part (b), is Leather Feet producing at the efficient scale? Support your answer with no more than two sentences.

International Business:

Question 3.

Describe the economic value of created from growth (economies of scale) and how to determine when diseconomies of scale exist. What is the management imperative to mitigate diseconomies of scale?

Use the three criteria for ethical decision-making to analyze the issue. The three criteria are obligations, consequences, and moral issues. Please answer all parts and provide if this issue is ethical and unethical, and why/ why not it may/may not be ethical/unethical.

Scenario: A large grocery chain orders its personnel department to screen out all grocery clerk applicants who have a prison record, a history of alcohol/drug abuse or mental illness, or a problem with obesity. (ethics)

how 3M ramped up its production of N95 masks. Many organizations are pitching in in this fight, including newspapers offering great coverage, retailers coping with new forms of demand-supply changes, and of course the great healthcare providers. GM plans to make 30,000 ventilators. Reflect on 3M's response, including how it had developed 'surge capacity' well before this contagion. Will this be a new normal going forward?

Read chapters 7&8 of your textbook and respond to the following questions. Briefly discuss restricted view of human reason, incomplete understanding of knowledge acquisition and inadequate link between theory & practice as three criticisms of the rational model(P.170-176). What does the new public service draw its inspiration from? How do citizenship and community contribute to restoring democratic citizenship and establishing a new public service?(P.198-200)

What are the most important drivers (or factors) that motivate firms to engage in global sourcing? Identify and discuss at least four drivers?

You are a worker at a local McDonald Restaurant! How many hours you are willing to work at a local McDonald’s at various wage rates? Provide the answer with reasoning!

Discuss why computer science professors earn more than English professors, and what comparable worth would mean to each professor’s salary.

International Business

Question 2.

Define location economies and the value each delivers to a firm. An example is sourcing in low cost country and delivering thru a logistics network as compared to sourcing local and delivering using Omni Channel approaches. Think hub and spoke versus Amazon.

A monopolist can produce at a constant average and marginal cost of ATC = MC = $5. It faces a market demand curve given by Q = 53 - P.

5. Suppose there are N firms in the industry, all with the same constant MC = $5. Find the Cournot equilibrium. How much will each firm produce, what will be the market price, and how much profit will each firm earn? Also show that as N becomes large, the market price approaches the price that would prevail under perfect competition. (Hint: your answers will be functions of N)

1. In 1920, when Presidential candidate Warren G Harding called for "return to normalcy" he was advocating
increased support for Progressive Era programs and the League of Nations
increased farm production and an emphasis on the rural lifestyle
reduced international involvement and less government regulation of business
reduced racial segregation and the elimination of discrimination against women

2. After World War I, most Americans wanted the United States to follow a foreign policy of
remaining involved in overseas affairs
supporting the League of Nations
isolationism in world affairs
using United States forces to maintain peace in Europe

3. The League of Nations, the Washington Naval Conference, and the Kellogg-Briand Pact were designed to keep
peace in the Northern Hemisphere. Why did these agreements fail to prevent World War II?
Independence movements in developing countries were too strong to be stopped
The United States was not a participant in any of the agreements
The agreements lacked enforcement powers
The United States was too involved in military rearmament

4. After World War I, the United States demonstrated its return to a policy of isolationism by
lowering tariffs on imports
refusing to sign the Treaty of Versailles
promoting the Marshall Plan
liberalizing immigration policies

5. After World War I, why did American farmers fail to share in the general economic growth of the United States?
Many immigrants were settling in the west and competing with the farmers
The Federal Government reduced the number of acres in which farmers could grow subsidized crops
Farmers could not produce enough to keep up demand
Overproduction and competition caused falling prices

6. Which action best demonstrated the United States effort to isolate itself from European conflicts after World War I
lowering tariffs
attempting to improve relations with Asia
failing to sign international disarmament agreements
refusing to join the League of Nations

7. One motivation for the passage of the immigration quota acts of 1921 and 1924 was
congressional support for free, unlimited immigration
the industrialists need for workers from southern and eastern Europe
the prevailing mood of welcome to foreign ideas
a recurrence of nativist attitudes following World War I

8. During the 1920s, the prevailing view of the governments' role in the United States economy was that the government
should
control the means of production
promote the welfare state
play a major role through regulatory action
interfere as little as possible

9. Which characteristic of the 1920s is best illustrated by the Red Scare, the trial of Sacco and Vanzetti, and the activities of the Ku Klux Klan
increased nativism
belief in unlimited progress
growth in humanitarian causes
faith in big business

10. The economic boom and the financial speculation, of the 1920s, were caused in part by
installment buying and an unregulated stock market
the expansion of civil rights to women and minorities
the mobilization of the economy for war
increased government restrictions on big business

2. Consider a Keynesian model of the economy with the following equations:

C = 300 + 0.7Yd

Transfer payments = 500

T = 0.1Y

I = 300

G = 400

X = 150

M = 0.2Y

(a) Calculate the equilibrium income level.

(b) Government spending on goods and services increases by 50. Calculate the new equilibrium level of income. (1 mark)

(c) If potential GDP is 2,750 what is the size of the output gap between potential and actual GDP (derived from (a) above)? How much should public spending have been increased by in order to have fully closed the output gap?

(d) In the short-run Keynesian model of income determination what is the cause of the output gap, and what are the possible macro solutions?

In Canada, what are the challenges facing government policymakers in dealing with natural monopolies?

What are the governments possible solutions for natural monopoly? List 3 possible examples and explain

How would you compare the diversification of economy and labor force skill set in Botswana, Venezuela and Chile?