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What is the difference between horizontal equity and vertical equity? What is the difference between a progressive and a regressive tax?
Explain the rationale for government intervention in the economy in connection with economic efficiency, equity, and the role of merit goods.
How many calls Telephone operators take, and how long they spend on an average call. Would you expect such information to increase productivity?
How might adverse selection cause the amount of work done by the company to fall by more than 10 percent?
Analyze how do piece rates provide incentives to work hard? Why is there not a greater reliance on piece-rate systems?
Who benefited from the protectionism of the Multifiber Agreement? Who suffered? The Multifiber Agreement expired on January 1, 2005.
If property rights to clean air are assigned to the nonsmokers, how might the efficient outcome be obtained?
Explain how a tax on fishing could achieve the efficient outcome. Would you expect that too many fish would be taken out this year?
How might the residents of Marple apply the lessons of Coase's theorem to reduce the amount of time they have to listen to the band?
How do markets work to allocate natural resources efficiently? In what cases will markets fail to give the correct signals for how quickly a resource like oil?
Professional sports leagues often have salary caps that limit the amount individual teams. Explain why such a restriction might make the team owners better off.
Firms in perfectly competitive markets do not need to behave strategically. Why not? Why do oligopolists need to behave strategically?
What effect will successful unions have on the level of wages paid by unionized companies? on the capital investment for those companies?
In what sector has union growth been largest? Why might this be so? Has the power of unions in the US economy been shrinking or growing in the last few decades.
Why does this seem puzzling, from the perspective of the theory of competitive markets? Why might a profit-maximizing firm offer such a large raise?
Advances in computer technology have enabled some firms to monitor their typists. Would you expect such information to increase productivity? Why or why not?
Why might the second company be suspicious about whether the worker is really worth $18 per hour? How might the worker attempt to overcome those fears?
How do piece rates provide incentives to work hard? Why is there not a greater reliance on piece-rate systems?
Has the power of unions in the U.S. economy been shrinking or growing in the last few decades? Why? In what sector has union growth been largest?
Would you expect to see greater price dispersion within a metropolitan area, or between several small towns that are fifty miles apart? Why?
Why might it be worthwhile for a profit-maximizing firm to enact such a policy?
Explain how the incentives of someone to look after a car she is renting may not suit the company that is renting the car.
How does imperfect information help explain why used cars cost more when sold by car dealers than by private individuals?