Question 1: In response to increasing thefts by drug addicts, the government passes legislation increasing both the penalty and probability of punishment for suppliers of illegal drugs. What would be a good prediction of what would happen to the rate of property crime committed by drug addicts if the price elasticity of demand for illegal drugs is -0.01? Please explain?
Question 2: Suppose that a firm was accused of illegally conspiring with other sellers to act as a monopolist. In searching for an expert witness, they discover one economist who has calculated the cross elasticity of demand for the industry's product to be +2.05, while another economist has calculated the cross elasticity of demand to be +0.43. Which economist would be best to hire to testify on behalf of the firm? Please explain?
Question 23: Im having trouble differentiating between economic efficiency and technical efficiency. Can you explain the difference to me? And how do the relation of these terms affect this statement:
"Cooking wiith gas makes sense as it is more efficient: it uses one-third less energy than cooking with electricity"
Please comment on this statement.