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Your firm uses an MRI machine to measure blood flow within the brain. If you could hook up the MRI to the typical person, what information would you collect?
Predict the effect of the import restrictions on equilibrium price of steel. Illustrate your answer with graph that shows the initial point and the equilibrium.
Predict the effect of the increase in demand on the equilibrium price of apartments.
Assume the price of public transit remains at $2. Use a graph to show the effect of the increase in the gas price on transit ridership.
By what percentage will the demand for coffee increase each year? How soon will the area have enough demand to support a fifth Starbucks?
Draw two sets of supply-demand curves, one with a more elastic supply curve. In the case of more elastic supply, is the deadweight loss larger or smaller?
Why does the rent maximum generate a deadweight loss? If not, why not? Use a supply-demand graph to depict the market with the maximum rent.
What sort of inefficiencies does the price control cause? Would you expect patients and doctors to find ways around the maximum price?
Draw a complete graph to show his assumption and logic. How would its analysis of rent control differ from Frudos? Illustrate with a complete graph.
In the equilibrium in the powdered milk market, the quantity is 100 million units and the price. Draw a graph to show the market effects of the minimum price.
Why is the price lower and the number of firms greater with the larger market size with trade in a monopolistically competitive industry?
Why is it that the greater the number of firms is in a monopolistically competitive industry the lower the price is, but the higher the average cost.
How does the shape of the trade partner's offer curve affect the change in the terms of trade resulting from a given shift in a nation's offer curve?
What is the effect on the volume and terms of trade if a nation's offer curve shifts or rotates toward the axis measuring its exportable commodity?
Which type of growth will most likely lead to a decline in the nation's welfare? What is meant by immiserizing growth?
What is the terms-of-trade effect of growth? What is the wealth effect of growth? When the nation is large enough to affect relative commodity prices?
Which sources of growth are most likely to be antitrade? Which types of commodities are most likely to result in protrade consumption? antitrade consumption?
How does neutral technical progress in the production of either or both commodities affect the nation's production frontier?
What effect do the various types of factor growth have on the growing nation's production frontier? What is meant by balanced growth?
How can our trade theory of previous chapters be extended to incorporate changes in the nation's factor endowments, technology, and tastes?
What is meant when we say that the trade theory discussed in previous chapters is static in nature? What is meant by comparative statics?
Show how transportation costs can be analyzed with production frontiers. (Hint: Relative commodity prices with trade will differ by the cost of transportation.)
Draw a figure showing the exports of the innovating and of the imitating country during the various stages of the product cycle.
How do the demand curves facing a perfectly competitive firm, a monopolistically competitive firm, and a monopolist firm differ from one another? Why?
In what way does monopolistic competition resemble monopoly? Why is the difference between monopolistic competition and monopoly important for consumer welfare?