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Problem
1. Total surplus is maximized at the equilibrium price and quantity. When demand increases, price increases. Explain how total surplus is still maximized if price increases due to an increase in demand.
2. When the price of gasoline was very high in the summer of 2008, several U.S. presidential candidates proposed implementing a national price ceiling to keep fuel affordable. How would this policy have affected producer and consumer surplus? How would it have affected total surplus?
Pretend that you are an editorialist, and write an editorial considering whether or not you believe that monopolies should be illegal and defend your argument using pertinent economic theory.
Drawing Conclusions Why are the automatic stabilizers effective fiscal policies that counter business cycles?
A rise in the price of coffee beans, which is a material for a cup of coffee, is responsible for these observations.
A town in the middle-of-nowhere is built up around a large 100 meter hill. Since the hill is in the center of a town, it is proposed at a town-hall meeting that a water tower be placed at the top of the hill
Through periods of inflation, all prices increase. Inflation rates differ across regions mainly because of differences in housing prices.
Compute the opportunity cost of an increase in the number of hours spent studying in order to earn a 3.0 GPA rather than a 2.0 GPA. Find out opportunity cost of an increase in income from $100 to $150.00
Explain how scarcity and choice are related. Economic theory says that a rise in the price of a good will cause people to buy less of it. If the price of meat increases and John Doe buys more meat, has the theory been refuted? Explain.
Why might growing securitization make it harder for bank supervisors to keep track of risks to the ?nancial system?
Identify at least one REIT. Describe the following in a 3 page analysis: Discuss your opinion regarding the future of REITs as a real estate finance tool.
for the statement below you are to write two answers. one answer should agree with the statement the other should
Matt spends $40 per month on peanut butter (good x, measured in jars) and bread (good y, measured in loaves). He wishes to consume the goods according to the following utility function: u(x,y) = min(2x,y).
A. Discuss your view of elasticity of gasoline based upon the changes we have experienced during the past few years.
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