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To be meaningful, a price ceiling must be below the market price. Conversely, a meaningful price floor - must be above the market price. What impact will a meaningful price ceiling have on the quantit
What is the difference between a price ceiling and a price floor? What will happen if a price ceiling is imposed below the market equilibrium? If a price ceiling for a good is set below the market equ
Suppose that college students in your town persuaded the town council to enact a law setting the maximum price for rental housing at $200 per month.
How will a substantial increase in demand for housing affect the wages and employment of carpenters, plumbers, and electricians?
Do business firms operating in competitive markets have a strong incentive to serve the interest of consumers? Are “good intentions” necessary if individuals are going to engage in actions
How is the market price of a good determined? When the market for a product is in equilibrium, how will consumers value an additional unit compared to the opportunity cost of producing that unit? Why
The price of X and Y are $40 and $60 respectively. Use the following table of total utilities to answer the following questions.Good Total Utility of X Total Utility of Y
Vinnie’s Place has enjoyed its monopoly position selling fast food in Far West, VA. The manager, Vinnie Manicotti, has heard that his success has attracted the attention of other companies.
What"s wrong with this way of thinking? “Economists argue that lower prices will result in fewer units being supplied. However, there are exceptions to this rule. For example, in 1972
What is the difference between substitutes and complements? Indicate two goods that are substitutes for each other. Indicate two goods that are complements.
Using the following information, calculate total utility and marginal utility.a. Plot the total utility curve.b. Plot marginal utility directly below total utility.c. At what marginal utility value do
How would you characterize your demand for health insurance — elastic or inelastic? Does the price elasticity of health insurance vary with age, ethnicity, gender, etc.? Does it vary depending o
Suppose that the learning effect coefficient in the production of wrist watches is -0.2. If the average cost of producing the first watch is $100, what will be the average cost of producing the 40th w
The owner of a fast-food restaurant estimates that she can produce and sell 1,000 additional hamburgers per day by renting more automated equipment at a cost of $100 per day.
Southern Oil Company produces two grades of gasoline: regular and premium. The profit contributions are $0.30 per gallon for regular gasoline and .50 per gallon for premium gasoline.
Jen left a job paying $75,000 per year to start her own florist shop in a building she owns. The market value of the building is $100,000. She pays $30,000 per year for flowers and other supplies
Johns goes to a football game and buys a ticket for $75. He has to take off two hours of work to go to the game. he earns $15/hr at work. His drive to the game requires $7 in gas. Given this informati
Which of the following flows from the government to the households, according to the circular flow diagram? A)Goods and services
If the inflation rate is 18%, the nominal rate of interest on the CD is 24%, and the interest is taxable (at a rate of 25%), what is the after-tax real interest rate on the CD? Hint: first calculate t
Which of the following observations is true of the federal budget between 1960 and 2010? A)The federal budget was in deficit in the early 1960s
Compare and contrast the demand curve for public goods and the demand curve for a private good. Evaluate the impact of the current trend toward the expansion of government services.
If a company invents a process that saves 280,000 per year - how much can the company afford to invest if they need to earn 20% per year and they want to recover their investment over a 10 year period
Bob views apples and oranges as perfect substitutes in his consumption, i.e., MRS = 1 for all combinations of the two goods. Suppose the price of apples is $2 per pound
A firm is focal point for a set of contracts. Explain the problems that (1) agency relationships, (2) asymmetric information, and (3) adverse selection can introduce to building a successful contract
Briefly explain whether each of the following is primarily a microeconomic issue or a macroeconomic issue. a. The effect of higher cigarette taxes on the quantity of cigarettes sold