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The essay should apply economic techniques and/or principles to analyse an environmental issue or policy. Choose one topic and write a 2,500-word essay on it.
Return to the description of the student loan program that opened the chapter. Would information asymmetry cause a problem in this situation? Why or why not?
Describe an information asymmetry in this situation. Explain who is likely to benefit from this information imbalance.
A club charges a flat fee for an open bar (all-you can-drink). Describe the moral-hazard problem.
The college admissions process involves both screening and signaling. Give an example of each. Who is doing the screening? Who is doing the signaling?
Explain why joining a fraternity or sorority might include elaborate or difficult rituals. Which is the more effective signal?
Why do advertisers use this technique rather than a direct description of the goods or services?
For which instructor will teaching evaluations be the most important this semester? Explain why?
Consider the market for auto insurance. Explain why insurers ask student drivers about their grades.
Why Is the new disclosure rule likely to benefit the average consumer? Explain your reasoning.
Describe briefly what economists call a multitask agency problem, and relate your answer to the case of microfinance.
What is yardstick competition? How does it differ from more general uses of competition? Illustrate your answer for the particular case of microlenders.
Show that implicit incentives can only be imperfect substitutes to the explicit monetary incentives obtained via a wage that is linked to performance.
Explain why in some markets a single firm without competitors will produce at a lower cost than if the firm faced competition.
A new company is considering opening a gym in the city. Give an example of an aggressive tactic Fit Fun might take to maintain its monopoly.
If both monopolies decided to raise prices 15 percent, which monopoly would be more likely to see its total revenue decrease? Why?
Why might the new monopolist produce less than the quantity that was produced when the market was competitive?
However, she's an inventor, not a businessperson. Explain to her how she should set the price for the eye-color treatment in order to maximize her profits.
Explain what will happen to the monopolist's profit- maximizing output quantity and the monopolist's profits.
Counter this argument by explaining how even a natural monopoly causes deadweight loss.
Present your candidate with an alternative view about why it may make sense to tolerate the existence of some monopoly firms.
Suppose that your state is considering a law that would force all monopolies to charge no more. Explain to your legislator the pros and cons of this approach.
What is meant by the natural level of income and employment? Why is the long-run aggregate supply curve vertical at the natural level?
Explain how appreciation of a country's currency could affect its aggregate supply curves when imported intermediate inputs are sizable.
If a country finds itself experiencing stagflation under a flexible-rate system, why is expansionary monetary policy unlikely to cure the problem?