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During World War II there was a freeze on wages, and corporations found they could evade the freeze by providing other fringe benefits such as retirement funds and health insurance for their employees. The Office of Price Administration, which administered the wage freeze, ruled that the offer of retirement funds and health literature was not a violation of the freeze. The Internal Revenue Service went along with this and ruled that employer-financed retirement and health insurance plans were not taxable income. Was the wage freeze an example of a price floor or a price ceiling? Use the model of demand and supply to explain why employers began to offer such benefits to their employees.
You are tasked with evaluating a project for reducing nutrient (nitrogen and phosphorus) loading into the Gulf of Mexico (GOM). These nutrients make their way into the GOM by way of the Mississippi River and primarily come from the runoff of chemical..
Can firm losing money go out of business in the short run? If it can’t, explain why not. On what basis does a firm decide whether or not to shut down? On what basis does it decide whether or not to go out of business? If the perfect competitor is los..
A road building contractor has received a major highway construction contract that will require 50,000 m^3 of crushed stone each year for 5 years. The stone can be obtained from a quarry for $7.80/m^3. As an alternative, the contractor has decided to..
Select an asset of your choice. For example you may select an appliance in your home, office, or in another place that have been in use for many years and you are thinking is time to replace it by a new one. After selecting the defender equipment and..
Suppose a particular labour market were in market-clearing equilibrium. What could happen to cause equilibrium wage to fall. If all money wages rose with inflation each year, how would real wages in this market adjust.
If one producer is able to produce a good at a lower opportunity cost than some other producer, then the producer with the lower opportunity cost is said to have an absolute advantage in the production of that good.
Write down the profit maximization problem of the representative firm. What is the new short run equilibrium price and production.
Walmart is laying off cashiers, and increasingly adopting the policy where customers must use self checkout or pay a fee. Jason Clarke is the manager of a Walmart. There are 20 cashiers and 8 self-checkout stations in this store to serve 1000 custome..
A service station owner in Staten Island, NY, was worried that raising the price of gasoline would cause the quantity demanded to fall by so much that he would be in a worse situation than if he did not raise the price.
At the end of the one-year contract, what will his "friend" offer John as the price for an extension of the deal?
List and support your choice of one industry where there is too much federal government regulation and one industry where there is not enough federal government regulation.
A firm faces two consumers with the following demand functions: p1(q1) = 400 − q1. p2(q2) = 300 − q2. The firm’s constant marginal cost of production is, c = 50. The firm may charge an access fee and per unit price (that the consumers can choose not ..
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