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What does it mean when an economist says that monopoly output is too little or a monopoly price is too high? By what standard? Compared with what?
Assume that a less developed country called LDC encourages direct foreign investment (DFI) in order to reduce its unemployment rate, currently at 15 percent.
Briefly explain why marginal revenue is equal to the market price for a firm in a perfectly competitive market but is less than the current market price.
- Analyze the relationship among inflation, unemployment, and the business cycle
Describe how students' information about colleges might be imperfect. Describe how colleges' information about prospective students might be imperfect.
Why Would allowing single drivers to pay to use car pool lanes increase economic efficiency? Explain.
What is the relationship between inflation and unemployment and the danger we face if the unemployment rate drops below that natural rate.
Group projects are often assigned in classes, with everyone in the group receiving. Explain why a free-rider problem might arise in this situation.
Explain why producing either less or more than the level of output at which marginal revenue equals marginal cost will reduce profits.
What are the three basic functions of money? Describe how rapid inflation can undermine money's ability to perform each of the three functions.
Under what circumstances will price be equal to average costs, so that even though there is a single firm in the market, it earns no monopoly rents?
Describe market equilibrium under monopolistic competition. Why does the price charged by the typical firm exceed the minimum average cost?
What are the gains from collusion? Why is there an incentive for each member of a cartel to cheat by producing more than the agreed-on amount?
Question: How can inflation and risk factor be accounted in a standard discounted cash flow analysis?
What action did the FOMC take, if any, regarding the level of the fed funds rate? Why did it make this choice?
Explain the incentive problem involved if regulators ensure that a natural monopoly will be able to cover its average costs.
Explain why such competition will not be as good for consumers as an extremely sophisticated regulator, and why it may be better than many real-world regulators
Does it follow that each of these is a monopolist? In each case, explain what sources of competition the firm might face that would limit its market power.
What does that imply about cross subsidies in AT&T's pricing of local and long-distance service?
What are some of the problems in implementing antitrust policy and some of the current controversies surrounding it?
Question: How are GDP, unemployment, and inflation as measures of activity related?
How might government ownership or regulation address this problem? What are the problems of each?
Explain why the marginal cost curve of a natural monopoly lies below its average cost curve. What are the consequences of this?
If the price changes above occurred for all goods across the economy during the four year period, explain how nominal GDP and real GDP would differ.
Explain why these practices might increase Nintendo's profits.