Suppose a billionaire takes an extra hour to arrive at work each day because he must drive slowly through a crowded slum. The billionaire proposes that the slum be demolished. The monetary gains of getting the billionaire to arrive at work faster are assessed at $10m. The monetary costs to the 1,000 residents of losing their homes is only $1m. So a cost-benefit analysis would recommend that the slum be demolished, even though the suffering it would inflict far outweighs the hedonic benefit to the billionaire.

● Make your own example of a situation where a cost-benefit analysis would make a recommendation that would reduce the general well-being. (150-400 words)

● What is “diminishing marginal utility of income”, and why is it relevant to the story you wrote?

● What is “equal marginal utility of consumption”? Is it a reasonable assumption? (Goodstein Chapter 2)

● Why do neoclassical economists (the majority of economists) not assess “well-being” when doing cost-benefit analyses? Why do they only use monetary costs and benefits? (150-400 words).

a) How do supply and demand work to determine the amount of a factor of production a firm in a competitive market employs?

b) What does marginal revenue productivity have to do with competitive demand for a resource?

The many identical residents of Whoville love drinking Zlurp. Each resident has the following willingness to pay for the tasty refreshment:

The cost of producing a bottle of Zlurp is $1.50, and the competitive suppliers sell it at this price. (The supply curve is horizontal.)

Each Whovillian will consume_____bottles and receive a consumer surplus of_____

.

Producing Zlurp creates pollution. Each bottle has an external cost of $1.

Taking this additional cost into account, total surplus per person in the allocation you previously determined decreases to________

.

Cindy Lou Who, one of the residents of Whoville, decides on her own to reduce her consumption of Zlurp by 1 bottle.

Cindy's consumer surplus (ignoring the cost of pollution she experiences) is now______. Her decision______increases   total surplus in Whoville by_____

.

Mayor Grinch imposes a $1 tax on each bottle of Zlurp.

Consumption per person is now_____bottles. This yields a per-person consumer surplus of_____not including the cost of pollution, a per-person external cost of_____, and government revenue of_____m per person. Total surplus per person is now_____as a result of this policy. (Hint: Total surplus is equal to consumer surplus minus the external cost of pollution plus government revenue.)

Based on your calculations, you would or wouldn't   support the mayor's policy because it decreases or increased welfare compared to before the tax.

(1) Suppose duopolists face the following market demand:

D=100-2P

And both have MC=20

(a) Assume they compete by simultaneously choosing prices (Bertrand-style). What is the Nash equilibrium outcome? List price, quantity supplied by each firm, and profits for each firm. (b) Assume they compete by simultaneously choosing quantities (Cournot-style) with prices set to clear the market (i.e. demand=supply). What is the Nash equilibrium outcome? List price, quantity supplied by each firm, and profits for each firm. (c) Assume the firms successfully collude by setting prices at the monopoly price and splitting the demand in half. What is the outcome? List price, quantity supplied by each firm, and profits for each firm.

Let’s assume that you plan an SMS marketing campaign for your term project client. Please describe your SMS marketing campaignas specifically as possible. You should consider the client’s target customers and the objective of the social media marketing.

1. A, B, C. Relative income inequality among US workers is greater today than during the 1980s. Separately answering as parts A, B, and C, give and explain three separate causes of increasing labor income inequality. Along with each answer, include the changes that give the source of each cause that you give, as well.

Where is the socially accepted line between "erotic suggestiveness" and "explicit sexuality" in advertising? Describe three hypothetical ads: one is safely suggestive, one that is as suggestive as it is acceptable (say, for a prime-time network TV spot or national newsmagazine), and one that is just over the line of explicitness.

Respond to two other posts. How or why do you think your answer differ? What roles might your age or social background play in these differences?

What does it mean to Discuss your recommended level of product “responsiveness.”?

The government of an economy forms a vital part of the circular flow model of income and spending as government plays an important role in achieving equality between the value of total production and total income represented in the circular flow model. This is important, as it shows the direct link between productivity and living standards of the people in a country.”

In terms of the above statement, discuss the type of fiscal policy that government needs to apply in order to achieve equality between the value of total production and total income. Motivate your answer with the aid of a diagram indicating the flows between the sectors of households, firms and government.

Perfectly competitive firms are facing a lot of challenges to be able to raise prices at their firms. Why do you think firms in this market structure are classified as a price taker and why do you think they struggle to raise prices? This assignment will require 3-5 paragraphs.

The U.S. healthcare system is experiencing a shortage of primary care physicians. Discuss at least one non-economic impact and two economic impacts that this shortage creates. Suggest at least one solution to this problem and provide a specific example.

In 2009, the effective income tax rate paid by the top 1% of households in the U.S. was 20.4%, while the bottom two quintiles actually paid _______ effective income taxes. Select the correct answer below:

1.even higher

2.negative

3.the same

4 zero

Which of the following are examples of command-and-control regulation?

Select two correct answers. Select all that apply:

• laws that require the use of filters in automobile tailpipes and smokestacks

• laws that specify the amount of pollution each producer is allowed to emit

• marketable pollution permits

• pollution charges per unit of pollution emitted.

Which of the following is not an example of a public policy goal or initiative that helps to build a ladder of opportunity in the U.S.? Select the correct answer below:

1.improved public schools

2.widespread college loans and grants for those in financial need

3.opportunities for job training and acquiring new skills

4.tax benefits for charitable donations

1.

What is a defining characteristic of a free trade area?

Multiple Choice

• Factors of production are allowed to move freely between member nations.

• Each member country is allowed to determine its own trade policies with regard to nonmembers.

• Member nations are required to have a common currency.

• Member nations are required to have a common monetary and fiscal policy.

• Member nations are required to have a central political apparatus that coordinates economic, social, and foreign policy.

2.

Establishment of the euro required participating national governments to

Multiple Choice

• have a sound fiscal situation.

• have stable exchange rates.

• be democratic in nature.

• give up control over monetary policy.

• have a high degree of price stability.

3.

Regional trade blocs in Africa have been slow to establish mostly because of

Multiple Choice

• significant political turmoil.

• inefficiencies in the economy.

• a lack of willing participants.

• an unwillingness to lower all nontariff barriers.

• a lack of intellectual property rights.

4.

Within a(n) _____, there is a level of economic integration that involves the use of a common currency, harmonization of members' tax rates, and a common monetary and fiscal policy.

Multiple Choice

• free trade area

• customs union

• common market

• economic union

• command economy

5.

The purpose of the Central America Free Trade Agreement is to

Multiple Choice

• lower trade barriers between the United States and the Central American Common Market countries.

• eliminate trade barriers between the CARICOM and Central American Common Market countries.

• reduce of trade barriers between Caribbean Single Market and Economy nations and Central American Common Market countries.

• introduce a common currency for Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.

• reduce tariffs and quotas between Costa Rica, Dominican Republic, and Nicaragua.

6.

Since it was introduced in 1999, how has the euro compared to the U.S. dollar?

Multiple Choice

• The value of the euro has been stable against the U.S. dollar.

• The euro's value has steadily appreciated against the U.S. dollar.

• The euro's value initially appreciated and then steadily depreciated against the U.S. dollar.

• The euro has had a volatile trading history against the U.S. dollar.

• The value of the euro rapidly surpassed, and continues to appreciate against the U.S. dollar.

7.

An expected consequence of the implementation of the North American Free Trade Agreement was

Multiple Choice

• low-skilled jobs would be moved out to Mexico resulting in lowering of average wage rates in the United States and Canada.

• increased imports from Mexico would help reduce the huge trade deficit for United States and Canada.

• lower incomes of the Mexicans would allow them to import fewer U.S. and Canadian goods, thereby decreasing demand.

• a large number of Mexican firms would hire low-skilled workers from the United States.

• some U.S. and Canadian firms would move production to Mexico to take advantage of lower labor costs.

8.

The Central American Free Trade Agreement is an agreement to lower trade barriers between six nations and

Multiple Choice

• the United States.

• the EU.

• France.

• the Philippines.

• Germany.

9.

Which of these situations shows how concerns over national sovereignty can act as an impediment to regional economic integration?

Multiple Choice

• Organization of the Petroleum Exporting Countries regulating the supply of petroleum as a cartel

• Asia-Pacific Economic Cooperation failing to establish itself as a regional arrangement

• admission of eastern European nations into the European Union

• Great Britain refusing to adopt the common currency of the European Union, the euro

• rise of the World Trade Organization

10.

What was a change proposed by the Single European Act?

Multiple Choice

• establish frontier controls among European Community countries

• increase the resources required for complying with trade bureaucracy

• place barriers to competition in the retail banking and insurance businesses

• apply the principle of "mutual recognition" to product standards

• reduce costs directly by not allowing lower-cost suppliers into national economies