Assignment:
1- Under the current administration, the US government has decided to significant increase its drug enforcement events in terms of supply and demand please discuses.
a. How would this policy influence the supply of illegal drugs? Why
b. In the long run, how would the policy influence the cost of illegal drugs? why ?
2- Over the past five years the US has experienced several virulent influenza outbreaks as a result, the market prices of the influenza vaccination has significantly increased. Several consumer groups are asking that the federal government instate price controls (i.e. price ceiling) on the influenza vaccination:
a. The positive effects associated with the use of use of the price ceiling
b. The negative effects associated with the use of use of the price ceiling
3- The Bureau of labor Statistic (BLS) has identified the unemployment rate has hit historical low of 3%
a. What effect will this occurrence have on the demand for gasoline in the short term (up to one yare).
b. How would this affect the cost of gasoline over mid-term (2 to 5 years) to long term (6 years and greater)
4- What is a positive externality? please explain in terms of equilibrium analysis why the presence of health insurance is a positive externality.
5- What is an eternal cost or negative externality? please explain in terms of equilibrium analysis why the presence of health insurance is a negative externality.