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Welfare Economics: main economic goals of a political-economic system are to promote efficiency (static and dynamic), equity, and macroeconomic stability.
a. Under what conditions will a free market meet these goals?
b. Identify a violation of these conditions that will lead an inefficient free market outcome. Prove your answer.
c. Do you think that conservative and liberal social philosophers agree on this list of goals?
he or she rents 63 movies per year at the same price per movie. What is the implied income elasticity of demand for movies? Are movies a normal good or an inferior good?
The ABC Company manufactures digital clock radios and sells on average 3,000 units monthly at $25 each to retail stores. It's closest competitor produces a similar type of radio that sells for $28. If the demand for ABC's products has an elasticity c..
Identify the major human activities that impact the environment. Give a specific example of such activities. Weigh the consequences, benefits, and necessities addressed by the activity and the cost of implementing a sustainable approach
Some politicians and financial/economists argue that the U.S. must embark upon an era of “financial repression” in which wealth must be kept from fleeing the country and must be taxed heavily within the country. What would be the rationale for financ..
Consumer spending during holiday seasons affects the aggregate demand (AD) in the economy. AD drastically declines during serious recessions. Explain what President Roosevelt might have been trying to achieve, using the model of aggregate demand and ..
What he didn't foresee was that number of T-shirt stores in South Padre would jump from roughly 10 to 40 within two years. Now he laments.
The Chief Financial Officer, Mr. Smith told him it was impractical because it would require the issue of common stock at a cost of 16 percent to finance the purchase. Is the company following a logical approach to using cost of capital?
The Einstein Bagel Corp. has used a frequent buyer program whereby a consumer receives a stamp each time she purchases one dozen bagels for $6. After a consumer accrues 10 stamps, she receives one dozen bagels free. Given this information, construct ..
Do the relative salaries of humanities professors and football coaches at major state universities reflect the relative value of football and humanities? Do they reflect the number of years that professors and coaches must spend acquiring an educatio..
Suppose banks keep no excess reserve and no individuals or firms hold on to cash. If someone suddenly discovers $12 million in buried treasure and deposits it in a bank, elucidate what will happen to the money supply if the required reserve is 10 ..
If the tax multiplier is -1.5 and a $200 billion tax increase is implemented, what is the change in GDP, holding everything else constant?
In a situation of first-mover advantage, a strategic move would be to:
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