Category: Economics

What is the deadweight loss caused by monopoly? Is the marginal cost (MC) greater than the average cost? Show your work.

Firm’s cost function shows the relationship between total cost (C) and output (Q).
Derive the cost function by minimizing C = 2K + 10L subject to a production function of Q = K0.5L0.3.

Does the average cost (AC) increase with output level? Show your work.

Is the marginal cost (MC) greater than the average cost? Show your work.

Suppose that a consumer has a Cobb-Douglas utility function U(X,Y)=100X0.4Y0.8 , where X and Y are quantities of goods X and Y consumed, with a budget constraint of PxX + PyY = M, where Px, Py, and M are the price of X, price of Y, and income (money), respectively.
a) Determine the demand functions of goods X and Y,
b) Write out the indirect utility function, V,
c) Prove that λ = ∂V/∂M.

Given an (inverse) demand function P = 485 – 5Q and the marginal cost curve
MC = 5 – Q + Q2. (Keep at least two decimal points in your calculations.)

Determine the social optimal price and quantity.

Find consumer and producer surpluses under the social optimal condition.

Determine the monopolistic price and quantity.

Find consumer and producer surpluses under the monopoly condition.

What is the dead weight loss caused by monopoly?

Calculate how many of civilian labor force in Riverside would fall into each type of unemployment.would exports from US to Japan and European countries increase or decrease? Would imports from Japan and European countries to US increase or decrease?

Case Study

Calculate how many of civilian labor force in Riverside would fall into each type of unemployment.

Discuss the change in price level and real GDP based on the events occurring in the scenario (Hint: study aggregate demand and supply shifters)

Provide counter-evidence that imports will bring overall benefits to our nation in terms of improving the total welfare (sum of consumer and producer surplus).

The exchange rate between dollar (US currency) and yen (Japan currency) was 120¥/$; and the exchange rate between dollar (US currency) and euro is 1.3€/$ in 2014, and the exchange rate increased to 130¥/$ and 1.5€/$, respectively in 2015.

Predict the pattern of export and import between those three countries in 2015 compared to 2014. In other words, would exports from US to Japan and European countries increase or decrease? Would imports from Japan and European countries to US increase or decrease?

What price is the Fundraising Committee favoring, and how many people will receive the DVD if this becomes the price of the suggested donation? Explain your answers.

The president wants the GSTCG to provide videos to generate the most possible donations (total revenue). What price is the president of the GSTCG favoring, and how many people will receive the DVD if this becomes the price of the suggested donation? Explain your answers.
(Enter your response here.)

The treasurer of the GSTCG wants the DVD program to be as efficient as possible so that the marginal revenue equals marginal cost. What price is the treasurer favoring, and how many people will receive the DVD if this becomes the price of the suggested donation? Explain your answers.
(Enter your response here.)

The Fundraising Committee wants the DVD program to generate as much profit in donations as possible. What price is the Fundraising Committee favoring, and how many people will receive the DVD if this becomes the price of the suggested donation? Explain your answers.

What is this manufacturer’s fixed cost? Explain how you determined your answer.What is Brenda’s break-even price for a dozen eggs? Explain how you found that answer.

Examine how changes in the cost of production affect pricing and production quantity decisions of a firm in a perfectly competitive market.

What is this manufacturer’s fixed cost? Explain how you determined your answer.

Given the information you computed in Table 2, what is the minimum cost output level? Explain why.

What is Brenda’s break-even price for a dozen eggs? Explain how you found that answer.

What is Brenda’s shutdown price for a dozen eggs? Explain how you found that answer.

If the market price of a dozen eggs at the local farmers market is $1.45 per dozen, will Brenda make an economic profit? Explain how you determined your answer.

If the market price of a dozen eggs at the local farmers market is $1.45 per dozen, should Brenda continue producing eggs in the short-run? Explain how you determined your answer.

If the market price of a dozen eggs at the local farmers market is 72 cents per dozen, will Brenda make an economic profit? Explain how you determined your answer.

If the market price of a dozen eggs at the local farmers market is 72 cents per dozen, should Brenda continue producing eggs in the short-run?

Explain how you determined your answer. g. If the market price of a dozen eggs at the local farmers market is 64 cents per dozen, will Brenda make an economic profit? Explain how you determined your answer.

If the market price of a dozen eggs at the local farmers market is 64 cents per dozen, should Brenda continue producing eggs in the short-run? Explain how you determined your answer.

 

 Critically analyses the main causes of change in the above macroeconomic variables; 60 marks

Research the current state of macroeconomic variables for the UK
Compose a report to the top managers of your company that:

Critically analyses the main causes of change in the above macroeconomic variables; 60 marks

Proposes and evaluates three options of how management can deal with the impact that the above macroeconomic variables have on your company.
40 marks

Discuss the consequences of increasing interest rates on the US economy, taking into consideration the global ramifications.

Econ dis

Monetary policy in the US, especially the desire to increase interest rates, will have international repercussions. One of these will be to strengthen an already strong dollar. Discuss the consequences of increasing interest rates on the US economy, taking into consideration the global ramifications.

Do you think price discrimination through coupons is fair? Should there be laws against this behavior? Why or why not?

One method of price discrimination for firms is the use of coupons and rebates. Firms are basically allowing consumers to self-identify their respective price elasticities of demand for a product.

Describe the last time you used a coupon or a rebate, and another time where you knew a coupon might be available and yet chose to not bother with it. Make sure to explain how the opportunity cost of your time and effort played a part in the choice you made.

Do you think price discrimination through coupons is fair? Should there be laws against this behavior? Why or why not?

What is the book about and its main lesson.What is your favorite chapter and why?What is your least favorite chapter and why?

Book Review

The book is called “Depression, War and Cold War Challenging the Myths of Conflict and Prosperity” by Robert Higgs. The review must be divided in the following sections:

What is the book about and its main lesson.

What is your favorite chapter and why?

What is your least favorite chapter and why?

Current events applications

How does the total surplus with a price floor (TSpf) (from question 7) compare to the total surplus without a price floor (TS) from question 3 above? Explain if it is more or less, and by how much? Show your calculations.

In the absence of a price floor, the maximum price that a few of the consumers are willing to pay is up to $100 per barrel of gosum berries. The market equilibrium (E) price is $50 per barrel. How much consumer surplus is created when there is no price floor? Show your calculations.

How much producer surplus is created when there is no price floor? Show your calculations.

What is the total surplus when there is no price floor? Show your calculations.

After the price floor is implemented, the legal minimum price that can be charged by suppliers is $70 per barrel. The maximum price that a few of the consumers are still willing to pay is $100 per barrel of gosum berries. With the price floor at $70 per barrel, consumers buy 300 barrels of gosum berries per month. How much consumer surplus is created with the price floor (CSpf)? Show your calculations.

After the price floor is implemented, the Chairman of Production Office buys up any barrels of gosum berries that the producers are not able to sell. With the price floor, the producers sell 300 barrels per month to consumers, but the producers, at this high price floor, produce 700 barrels per month. Keeping in mind that the Chairman of Production Office buys up any barrels of gosum berries that the producers are not able to sell, how much producer surplus is created with the price floor (PSpf)? Show your calculations.

The Chairman of Production Office buys any barrels of gosum berries that the producers are not able to sell. With the price floor, the producers sell 300 barrels per month to consumers, but the producers, at this high price floor, produce 700 barrels per month. How much money does the Chairman of Production Office spend on buying up surplus gosum berries? Show your calculations.

The emperor of Gondwanaland must collect taxes from the people to pay for the purchases of surplus gosum berries by the Chairman of Production Office. As a result, total surplus with a price floor (TSpf) is reduced by the amount the Chairman of Production Office spent on buying surplus gosum berries. Using your answers for questions 4, 5, and 6 above, what is the total surplus when there is a price floor (TSpf)? Show your calculations.

How does the total surplus with a price floor (TSpf) (from question 7) compare to the total surplus without a price floor (TS) from question 3 above? Explain if it is more or less, and by how much? Show your calculations.