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Suppose consumers are pessimistic, expecting all sour kiwifruit. Is this an equilibrium? Illustrate with a graph. What is the price of kiwifruit?
How much is the typical buyer willing to pay for a used car in the mixed market? Is the $16,000 price an equilibrium price? Why or why not?
Suppose you could pay a finders fee to a personal shopper/mechanic who will find you a plum. What is the maximum you are willing to pay as a finders fee?
In equilibrium, will the market be thin or will all the used MP3 players in the market belemons? Explain and illustrate your answer with a complete graph.
Purchasing a Fleet of Used Cars. You are responsible for buying a fleet of 10 used cars for your employees. Which brand of car should you pick?
Groucho Club. Consider a classic quip from Groucho Marx: I won t join any club that is willing to accept. Relate the quip to the adverse-selection problem.
No one can distinguish between lemons and plums. Would you expect the market to be dominated by lemons? Illustrate with a completely labeled graph.
Predict the equilibrium prices of the two types of cars and defend your answer with two graphs, one for each type of car.
Question: Price Elasticity and Cross-Price Elasticity for Demand for Florida Indian River, Florida Interior, and California Oranges
What price should you charge for a midsized automobile if you expect to maintain your record sales?
What is the arc cross elasticity of demand between Future Flight's and Soaring Free's frisbees?
Please write a letter of 4-6 pages including, but not limited to the following: - the main differences between microeconomics and macroeconomics
Discuss why public health officials generally advocate the use of cigarette taxes to reduce teenage smoking
The price elasticity of demand for imported whiskey is estimated to be -0.20 over a wide interval of prices.
Given this information, is it surprising that the company's revenue increased when it decreased the average selling price of its phones? Explain.
Evaluate this view in terms of the external economy model.
What about welfare in the two countries? Suppose, on the other hand, that Country Y retaliates with an export subsidy of its own. Contrast the result.
China was the first to open up. Now that India is also opening up to world trade, how would you expect this to affect the welfare of China?
Create a standard trade model for the U.S. and Indian economies that shows how relative price declines in exportable services.
Counterpart to immobile factors on supply side would be lack of substitution. Show that an improvement in the terms of trade benefits this economy as well.
Illustrate the gains from trade between the two countries using the standard trade model, assuming first that tastes for the goods are same in both countries?
Is this a shortsighted policy or a rational one in view of the interests of union members? Analyze How does the answer depend on the model of trade?
Can we still say that raising cattle is land-intensive compared with farming wheat? Why or why not?
Suppose the real interest rate increases to 5%, but everything else remains as in part (a). Compute the debt-to GDP ratio in 10 years.
What is the primary deficit/surplus ratio to GDP? What is the inflation-adjusted deficit/surplus ratio to GDP?