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Following are observations on the market price and the quantity of good X produced and consumed. Can we conclude that the market demand for X slopes upward?
Start the problem over and assume that there is an effective floor price (above equilibrium) on potato chips. What happens to the price of popcorn?
An external event decreases the variable cost of producing flour. Using supply and demand, show what happens to the price and quantity of eggs, flour and cakes.
Why do you (probably) not object to the airline practice of bribing passengers off the plane, but you would object if you learned that the airline had bribed.
What happens to market price and output? In qualitative terms, what happens to the incomes of producers in Illinois?
What do you expect will happen to volume of auto accidents if no-fault insurance replaces current system in which driver who causes accident pay the victim?
How about lawsuits and trials where the sides have roughly equal probabilities of prevailing?
If so, what will be the likely effect on the number of accidents? Give a numerical example showing that the safety requirement might actually increase.
Explain, being careful to specify exactly what you mean by the price of children. What is your evidence? How about the demand for high grades in this course?
It is, however, more likely that those choosing alcohol will be more likely to consume it in the form of bourbon than beer. Explain why.
Does this mean advertising is economically inefficient? If not, explain how it can simultaneously create value and increase market prices.
Identify some other institutions whose effects on lowering information costs are similar to those of advertising.
Draw the economy's production possibilities before and after a natural disaster that lowers the banana harvest but does not affect anchovies.
Jones and Smith have identical marginal costs for anchovies and bananas. Explain why mutually beneficial trade cannot take place between them.
Under what circumstances would the farmer prefer to get a larger percentage? When might the consumer prefer that the farmer get more?
Why might the school's administration make trades like these illegal even though they leave us both better off?
If, instead of $10, subject A gets $200 to give away, what do you expect will happen to the amount she offers subject B? Why?
Surely we would agree that it is rational to attempt to stay alive, because every day we all do just that. Are suicidal terrorists rational? Why or why not?
Jones graduated college a few years ago and can't find a good job. When I suggested she go back and major in economics this time. Is this behavior rational?
What kinds of competition are allowed in business but not in campaigns for political office and vice versa?
Why are you sure he was acting altruistically rather than selfinterestedly? Are you sure he is acting self-interestedly rather than altruistically?
How would an economist decide on the critical percentage at which the fence should not be built?
Is her conclusion justified? Why? Would economics be wrong if she cut all their pay and they did not try to get away with more loafing on the job?
You conclude that people only require a small wage premium to induce them into risky lines of work. How does selection bias make your conclusion doubtful?
Shopping for prices is a common form of information gathering. Construct a model of shopping behavior that explains these facts.