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Draw a demand and supply diagram for the unskilled labor market, and discuss the effects of a minimum wage. Who is helped and who is hurt by the minimum wage?
Explicit and Implicit Costs Amos McCoy is currently raising corn on his 100-acre farm. Is he currently earning an economic profit? Why or why not?
Indicate Chris's consumption level of A and B. Explain why this is a consumer equilibrium. What can you say about Chris's total utility at this equilibrium?
Consumer Preferences The absolute value of the slope of the indifference curve equals the marginal rate. What would the indifference curves look like? Explain.
Global Economic Watch and Case Study: The Marginal Value of Free Medical Care. Describe the consumer surplus of the average citizen in each category of country.
What can you say about the marginal valuation that consumers place on the 300th shirt, the 700th shirt, and the 1,200th shirt they might buy each year?
Role of Time in Demand In many amusement parks, you pay an admission fee to the park but you do not need to pay. How do people choose which rides to go on?
What would be the impact of a reduction in co-payments? What is the impact on consumer surplus of offering some coverage for prescription medication?
What must be true about the equilibrium relationship between the marginal utility levels of the last unit consumed of each good?
Assuming that the consumer is in equilibrium and is consuming both X and Y, what must the marginal utility of Y be?
Utility-Maximizing Conditions For a particular consumer, marginal utility of cookies equals marginal utility. what should the consumer do to attain equilibrium?
How is this practice related to diminishing marginal utility? What restrictions must the restaurant impose on the customer to make a profit?
But so many jobs were lost in the boat-building industry that the measure was finally repealed. What did Congress get wrong in imposing this luxury tax?
Under what conditions of demand and supply elasticities does this occur? Under what conditions is little of the tax passed on to consumers?
By how much would farm income change compared to what it would have been without government intervention?
What areas in the figure would you use to illustrate the net change in farmers' total revenue as a result of the increase in supply?
By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?
Which types of taxes are most important at each level of government? Which two taxes provide the most revenue to the federal government?
Government Often it is said that government is necessary when private markets fail to work effectively and fairly. Discuss how private markets might break down.
Household Production What factors does a householder consider when deciding whether to produce a good or service at home or buy it in the marketplace?
Use your understanding of opportunity cost to explain the idea that the Canadian province of Ontario has a comparative advantage in the financial sector.
Economic Systems The United States is best described as having a mixed economy. What are some elements of command in the U.S. economy?
Under what circumstances would your personal PPF shift outward? Do you think the shift would be a parallel one? Why, or why not?
If the supply of capital falls by 10 percent and the supply of labor increases by 10 percent, how will the PPF for wheat and cloth change?
What is the cost of producing an additional car when 50 cars are being produced? What do your answers tell you about opportunity costs?