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Give an example of an externality that you have personally experienced. What makes it an externality? Is it possible for the government's solution to market failure actually make the failure worse? Explain using examples.
Consider a Stackelberg competition with one leader and one follower. All products produced by the firms are homogeneous. Consider a Stackelberg competition with one leader and one follower. Determine the equilibrium price, and the quantity produced b..
How does the global economy connect American car buyers and Russian bureaucrats? One person who can answer is Reg Modlin, an emissions specialist at DaimlerChrysler AG's U.S. unit. Mr. Modlin, like many other auto-industry executives worldwide, has s..
Which of the following would be considered a transfer payment by the government?
What could firm A do to make its threat credible without building excess capacity? Will firm A use the low price as a threat if firm B enters?
Imagine working at the Trading Desk at the New York Fed. Explain whether you would conduct open market purchases or sales in response to each of the following events. Justify your recommendation. The latest FOMC Directive calls for an increase in the..
In "Final Jeopardy" (pp. 234-242), Stephen Baker expresses an interesting look at the way technology, especially in terms of machines, could dramatically change the relationship between mankind and technology—not just helping us to locate information..
Expansionary monetary or fiscal policy would most likely be effective in reducing which type of unemployment? .Frictional unemployment
Suppose that the inverse market demand for pumpkins is given by P=$10-0.05Q. Pumpkins can be grown by anybody at a constant marginal cost of $1. If there are lots of pumpkin growers in town so that the pumpkin industry is competitive, how many pumpki..
Determine also show how much these firms will sell and what they will charge.
Suppose there is a technological change that allows manufacturers to make cell phones much more cheaply; in fact the price falls by 25%. If the short run price elasticity of demand is -0.8, how much does price change? Are cell phone producers better ..
Which fiscal policies might activist Keynesian economists recommend helping a depressed economy regain full employment
Suppose the marginal product of capital is 16 and the marginal product of labor is 3. If the price of capital is $4 and the wage rate is $3, then in order to minimize costs the firm should use:
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