Discussion:
Discussion 1
Critically analyze the pros and cons of putting a price ceiling on prescription medicine. Make sure to use concepts from both chapters seen this unit such as government intervention, inefficiencies, price elasticity, etc. in your answer.
This will need to be at least 150 words.
Discusssion 2
How have you responded to increases in the price of gasoline over the past few years? How would you respond if the price of gasoline doubled over the next two years?
What alternatives do you have for buying gasoline? Could you change to zero consumption of gasoline in the short run? In the long run?
In the short run, when the price of gasoline increases, what happens to the income you have to spend on other goods?
Try to use concepts seen in this unit such as budget constraint, income and substitution effects, etc. in your answer.
This again has to be at least 150 words.
Discussion 3
Suppose a business experiences a sudden increase in its fixed costs. For example, suppose property taxes increase dramatically. What impact, if any, will this have the firm's AFC (average fixed cost), AVC (average variable cost), ATC (average total cost) and MC (marginal cost) and therefore these cost curves? Why?
This one has to be at least 150 words
Discussions 4
Provide an example of a real-world industry or market that would be described by economists as a natural monopoly. Why might government want to regulate natural monopolies?
This will have to be over 150 words as well