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Consider the market for ipods. The government decides to impose a price ceiling on ipods. You are told that this is an effective price ceiling. Describe what would make this an effective price ceiling
Use the following information about an agricultural market for cotton to answer this set of questions. The market demand curve for cotton is given by the equation P = 200 – .005Q while the marke
What is the equilibrium price and equilibrium quantity of bicycles in Wheelerville? Calculate the value of consumer surplus, producer surplus, and total surplus in this market.
You know that the income elasticity of demand for doughnuts is equal to 1.2 You read in the newspaper that the economy has entered a recession
Suppose that the government thinks that gasoline consumption is too high. Suppose the government wishes to decrease gasoline consumption by 20,000 gallons per day. How big an excise tax would need to
Suppose you know that the price elasticity of demand for good X has a value of 2. Suppose that the price in the market is initially $10 and the quantity demanded is 100 units. If price in this market
How does the problem of limited and bundled choice in the public sector relate to economic efficiency? Why are public bureaucracies alleged to be less efficient than private enterprises?
Why is it desirable for ceiling prices to be accompanied by government rationing? And for price floors to be accompanied by programs that purchase surpluses, restrict output, or increase demand?
Economists often stress that congestion helps account for the law of the diminishing returns.With this in mind, list and explain related increasing costs caused by traffic jam in Ho Chi Minh City, Vie
A country recently passed a food stamp legislation. Qualified households are given food stamps, which can be used to purchase foods, but they cannot legally re-sell the food stamps
Unemployment in the labor market is increased by forces that keep wages from falling to the equilibrium level. Other than efficiency wages, unionism, and minimum wages, what other factors might cause
Some economists studying the effects of the minimum wage law have found that it tends to reduce the employment of black teenagers relative to white teenagers. Briefly explain the economics behind this
Minimum wage laws are controversial for many reasons. One is that they may not be beneficial to the workers that they are most intended to help.
In 1914, Ford Motor Company doubled its wage to $5 per day, a rate that was considerably above the average wage at that time.In terms of efficiency wages, explain why Ford would have had an incentive
Assume that the government imposes a $20 minimum wage. Find the new quantity of labor demanded and supplied.
What is an efficiency wage, and how do efficiency wages affect the labor market?
How would you expect each of the following factors to affect the natural rate of unemployment?There is an increase in the rate of technological change
Draw a graph of the aggregate labor market in equilibrium. Then consider each of the following scenarios. In each case, show the effect on the market and explain what will happen to the real wage and
Suppose that workers become concerned about the future and therefore wish to increase their hours of work relative to leisure. At the same time, there is an increase in the capital stock, making worke
When the economy is at full employment, are all workers employed? Briefly explain.
Increases in structural unemployment can result from a recession but are more commonly associated with other changes, such as the development of new products that replace old products.
What type of unemployment is the quote referring to? What may happen if workers become discouraged?
How does the natural rate of unemployment change as the demographic composition of the population changes?
What is the effect of unemployment insurance on the natural rate of unemployment?
Which has more impact: a doubling of the jobfinding rate or a halving of the job-separation rate? Does your result have any implications for government policy?