Questions:
1.If the cross-price elasticity is negative 1.2 (-1.2), what do you expect to happen to quantity demanded for bonds and bond prices if the stock price is expected to increase by 11%?
2. Walmart is vilified by many people as being evil, destroying jobs and cities. Others note that it has the lowest prices and is the largest employer in the country. What is the difference? Is Walmart a monopsonist?
3. How does technological change benefit firms? Does it benefit workers?
4. Demonstrate how a minimum wage affects the unskilled labor market. Is the labor market perfectly competitive? Can you find any examples of monopsonistic hiring? What would a minimum wage do in a monopsonistic market?
5. Suppose the price elasticity of demand for stocks is 1.5. This means that for every 10 percent increase in stock prices, the quantity demanded will decline by 15 percent. Does this price elasticity make sense? Explain.
6. What led to the rise in housing prices after 2001? Was this a housing bubble? If so, what event(s) popped the bubble?