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Explain how basic research can be thought of as a public good. Why is society likely to underinvest in basic research?
How do positive externalities arise from R & D? Why do externalities imply that there may be too little expenditure on research by private firms?
Why might it be harder to raise capital for R & D than for other projects? How can established firms deal with this problem? What about start-up firms?
Explain the trade-off society faces in choosing whether to offer patents for long or short terms, and whether to offer broad or narrow patents.
In what ways do industries in which technological change is important not satisfy the assumptions of the basic competitive model?
If Mexican workers receive a third of the wages that U.S. workers do, why don't all American firms move down to Mexico?
What induces firms to create just the right number of additional jobs to match an increase in the number of workers?
According to the Inflation Calculator, what would $100 in 1860 be worth in 1865? By how much did prices rise during the Civil War?
An increase in the consumer price index will often affect different groups in different ways. How would you calculate an urban CPI or a rural CPI?
Geoffrey spends his allowance on three items: candy, magazines, and movie video rentals. Calculate Geoffrey's price index (CPI) for this basket of goods.
Saw the highest average rate of inflation in the United States? Which of these decades saw the lowest average inflation rate?
Suppose the Farsighted Forecasting Group, an organization of private economists. According to Okun's Law, by how much is the unemployment rate likely to rise?
How might you expect output per worker and output per hour to move over the business cycle?
If the output gap is a negative 2 percent, what does Okun's Law tell us will be the level of cyclical unemployment?
What was the unemployment rate for the most recently available month? How has the unemployment rate changed over the past year?
What is the latest figure on the economy's nominal GDP? On real GDP? What was the growth rate of real GDP during the most recently available quarter?
Why are workers in some groups more affected by increased unemployment than those in other groups?
What are the differences among the final goods approach to measuring GDP, the value-added approach, and the income approach?
What happened to these two deficits in the 1990s? What has happened to them during the past five years?
What is the current unemployment rate in the United States? What is the current rate of inflation?
In the absence of any price controls, what would you predict will happen to drug prices in the United States? in Canada?
Explain why the former may run into problems if a large generation is followed by a generation with many fewer members.
Consider an individual contemplating whether to quit her job and go on welfare. How might the fact that welfare is time limited affect her decision?
What happens to her incentives to work? Is it possible that imposing the tax actually will reduce the tax revenues the government receives from the rich?
How redistribution take place through an entitlement program like Social Security, to which all workers contribute and from which all retirees receive benefits?