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Draw a typical worker's budget constraint. Explain why the budget constraint has a kink at 37 hours of work. Discuss the consequences of the kink in the budget.
Draw a diagram to illustrate this shift in your budget constraint between leisure and consumption. After considering the idea of income and substitution effect.
How does a technological change that makes workers more productive affect the demand for labor at a given wage and price?
What does the labor supply curve look like if income effect dominate substitution effect? What will it look like if substitution effect dominates income effect?
How will the income effect of a fall in wages affect hours worked? How will the substitution effect of a fall in wages affect hours worked?
How do people make choices about the amount of time to work, given their personal tastes and real wages in the market?
Draw a U-shaped average cost curve. On your diagram, designate at what price levels you would expect entry and at what price levels you would expect exit.
Calculate and graph the marginal cost, the average costs, and the average variable costs for the Total Cover-up House-Painting Company.
Calculate the company's total costs, and graph the revenue curve and the total cost curve. Do the curves have the shape you expect?
What is the relationship between the way accountants use the concept of profits and the way economists use that term?
What determines firms' decisions to enter a market? to exit market? Explain the role of the average variable cost curve in determining whether firms will exit.
What rule determines the profitmaximizing level of output? What is the relationship between a firm's supply curve and its marginal cost curve?
Draw the total cost curve on one graph. On another graph, draw the marginal cost, average cost, and average variable cost curves.
Draw the total and average cost curves for both methods. At what levels of output will it use the high-fixed-cost technology?
Using the information in Problems 1 and 2, draw the total cost curve for the Tom, Dick, and Hairy Barbershop on one graph.
What are diminishing, constant, and increasing returns to scale? When might you expect each to occur?
explain why a ceiling on rents would reduce the total surplus. 6. If you do not know whether you would be able to get a rent-controlled apartment.
Which program is more likely to have a Pareto-efficient outcome? Describe why the other programs are not likely to be Pareto efficient.
If not, explain how total output of both goods can be increased by shifting machines and labor between industries.
Why is it necessary to impose price controls or otherwise change prices in the competitive marketplace to make it more equal?
What is the difference between partial and general equilibrium analysis? When is each one especially appropriate?
What is required for the economy to be Pareto efficient? If the conditions of the basic competitive model are satisfied, is the economy Pareto efficient?
What is produced, and in what quantities? How are these goods produced? For whom are they produced? Who makes the economic decisions?
Consider an individual who is borrowing. What happens to the real interest rate? Why do you expect the individual to borrow more?
Why is the present discounted value of the prize much less than $10 million? Calculate the present discounted value if r = 5 percent.