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What are the major factors that weaken the case for market allocation? Under what conditions is public-sector intervention most likely to improve the situation?
What is the short-sightedness effect? Explain why it may result in public policy that promotes economic inefficiency.
Outline your reform proposal point by point. Discuss possible negative repercussions that might result when your plan is instituted.
Why are individuals willing to supply resources? Do you think that the number of aero-space engineers will increase very much after six months? After two years?
Why would the demand curve of a resource (typically) be more elastic if it were assumed that buyers had more time in which to respond?
Outline the views of Professor Galbraith on the competitiveness of the U.S. economy. Does he view big business as bad?
How competitive is the U.S. economy? Is it less competitive today than three or four decades ago?
Outline your views of proper public policy that would both promote competitiveness and be consistent with economic efficiency.
What are some of the factors that determine the difficulty of entering a particular industry? Would you expect the rate of profit to be greater in an industry.
What percentage of the purchase price of an item, on average, goes to accounting profit? What would happen if these accounting profits were eliminated?
What are the major factors that influence the profitability of an oligopolistic firm? Does an oligopolist have an incentive to produce efficiently?
How would someone decide which method of production to use? Would it have anything to do with the prices of the different productive resources? Why?
Why would a group of investors be willing to pay a higher interest rate on borrowed funds when they believe that inflation will be higher?
What uncertainty is involved in the purchase of a U.S. government bond, assuming nö risk of default in bond payments?
Which plan is likely to generate more oil production? (Remember the effects of marginal price changes and the discount rate.)
How stable has the real rate of interest been? From the Federal Reserve Bulletin, or the Economic Report of the President.
What price of timber per board foot would be required for the silvicultural practices to be worthwhile, if the appropriate discount rate was 12 percent?
What are the major determinants of the elasticity of demand for a specific category (for example, physicists, craftsmen, etc.) of labor? Explain.
How are public employee unions different from other unions? How are they similar? Would you expect them to behave differently? Why?
All the employees at the plant where John works must belong to the union as a condition. Evaluate the ability of John's union to raise wages. Explain.
Henry Smith belongs to textile workers' union. Approximately two-thirds of Henry's fellow. Evaluate the ability of Henry's union to raise his wages. Explain.
Will the higher wage rates reduce the industry's rate of profit in the short run? Who will actually shoulder the burden of the higher wage rates?
Why does consumption have any implications for the measurement of inequality in the distribution of income? Explain.
Which law of economics helps to explain why diamonds are more expensive than water? Cite evidence to support your answers to these two questions.