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Would wages in construction be higher or lower than wages for other jobs? Would left-handed workers make more or less than right-handed workers?
Discuss why do some students take unpaid internships when they could be working summer jobs and earning an income?
In Polarity, four families earn $10,000 each, two earn $50,000 each. Which community has the more unequal distribution of income? Explain your response.
How do these immigrants affect the income inequality in this country? Is this type of immigration good or bad for the United States, and why?
Suppose that a wealthy friend asks for your advice on how to reduce income inequality. What advice would you give, and why?
Why would you recommend that the company continue the new compensation system? Explain your response.
Which program does the most to help the poor? Describe the work incentives under each program.
What is the relationship between total utility and marginal utility? How is diminishing marginal utility reflected in the law of demand?
What does it imply when we say that the marginal utility per dollar spent is equal for two goods?
If a one-day pass costs $40 but the two-day pass costs $50, what is the average cost for the two-day pass? What is the marginal cost of the two day pass?
Describe the two-step process used to identify the profit-maximizing level of output.
Under what circumstances will a firm have to decide whether to operate or to shut down?
How do profits and losses act as signals that guide producers to use resources to make what society wants most?
A firm is experiencing a loss of $5,000 per year. The firm has fixed costs of $8,000 per year. Should the firm operate in the short run or shut down?
If Barney clears 20 driveways a day, should he continue to operate or shut down? If this situation persists, will Barney stay in the industry or exit?
Describe the difference between a monopoly and a natural monopoly. Give an example of a barrier that can lead to monopoly.
Why is a monopolist's marginal revenue curve less than the price of the good it sells?
What is the monopolist's rule for determining the profit-maximizing output? What two steps does the monopolist follow to maximize profits?
Why does a monopolist operate inefficiently? Draw a demand curve, marginal revenue curve and a marginal cost curve to illustrate deadweight loss from monopoly.
Why are the necessary conditions met to establish a monopoly? If the crystals are government-owned or -regulated, what price should the government set for them?
Recalling what you have learned about elasticity. What can you say about the connection between the price a monopolist chooses to charge?
Create a new graph that illustrates the consumer surplus, producer surplus, and deadweight loss after the monopoly enters the market.
Explain why the city council's estimate of the revenue increase is likely to be overstated. Use a graph to illustrate your answer.
Suppose that a monopolist's marginal cost curve shifts upward. What is likely to happen to the price the monopolist charges?
What two challenges must a firm overcome to effectively price-discriminate? Why does price discrimination improve the efficiency of the market?