Category: Economics

Create a problem statement
A problem statement can be short — one or more sentences — but should give a sense of what you are trying to achieve (e.g., fix, change, stop or start something) and the broad outcomes you would like.
This was Professor Dyer’s example: “Repurpose abandoned oil rigs in the Gulf of Mexico to support the transition to green energy and to provide opportunities for marine aquaculture.“ Note that it has a specificity about it (it doesn’t aim to make the whole offshore oil industry sustainable), but it is also very open as to how this problem might be solved.
Your first task is to build a problem statement about a current situation Champion Energy Corporation faces relating to sustainability.
Create scenarios around the problem statement
For this step, you will develop three scenarios as part of a narrative for Champion Energy Corporation. These should be a “best case,” a “worst case” and an “in-between” scenario so that the organization understands its risks and opportunities as it makes decisions.
Best case
In-between
Worst case

Two firms are planning to sell 10 or 20 units of their goods. The payoff matrix illustrated at right shows profits when the firms produce simultaneously, the first game tree shows profits when Firm 1 decides how much to produce first, and the second game tree shows profits when Firm 2 decides how much to produce first.
Part 2
How does your analysis change if the government imposes a lump-sum franchise tax of $4040 on each firm?
Part 3
If the government imposes a lump-sum franchise tax of $4040 on each firm, then
Part 4
at least one firm will shut down and produce nothing in each game at the Nash equilibria.
the Nash equilibria for the games will not be affected.
each firm in each game will now have a dominant strategy leading to each Nash equilibria.
each firm will produce more output in each game at the Nash equilibria.
the games will no longer have Nash equilibria.
Part 5
Now explain how your analysis would change if the firms have an additional option of shutting down and avoiding the lump-sum tax rather than producing 10 or 20 units and paying the tax.

American’s tend to be concerned about the nation’s unemployment rate as it has an impact on household’s financial decision-making. A low unemployment rate might encourage consumers to increase their consumption because the economy appears to be solid; in that, folks have good jobs. A high unemployment rate might cause consumers to decrease their consumption as the economy might be at risk for a recession or a downturn. Monthly, the Bureau of Labor and Statistics (BLS) releases to the media and the public the unemployment rate. However, the government has several different unemployment rates; two of which are U-3 and U-6. Match each unemployment rate with its description.
Question 53 options:
This unemployment rate includes discouraged, underemployed, and unemployed workers in the country. In fact many economists view this as the more meaningful rate because it covers a larger percentage of people who are unemployed.
This unemployment rate is the most commonly reported rate in the U.S., representing the number of unemployed people actively seeking a job.
1.U-3 2.U-6

Tax Policy.
Answer the multiple choice questions below. For each question, only one answer is correct.
6A.
Labor supply elasticity measures
the percentage change in hours worked in response to a percentage change in job postings.
the percentage change in hours worked in response to a percentage change in salary.
the percentage change in salary in response to a percentage change in job postings.
the percentage change in salary in response to a percentage change in the hours worked.
6B.
Suppose we would find conclusive evidence that the current income tax rate is on the decreasing, right-hand side of the Laffer curve. Then, the best policy change would be
to increase income taxes because this would likely lead to higher tax revenue.
to increase income taxes because this would likely lead to more hours worked.
to decrease income taxes because this would likely lead to more hours worked, even though it would also lower tax revenue.
to decrease income taxes because this would likely lead to more hours worked and higher tax revenue.

a. The basic determinant of the transactions demand for money is the level of nominal GDP (price level, interest rate, reserve ratio).
b. The basic determinant of the asset demand for money is the interest rate (reserve ratio, price level, level of nominal GDP).
c. Total money demand is the horizontal sum of the transactions demand for money and the asset demand for money.
d. The equilibrium interest rate in the money market is determined at the intersection of the total demand for money curve and the supply of money curve.
Complete the following statement. If there is an increase in the total demand for money:
The equilibrium interest rate will rise.
The money supply will fall.
The money supply will rise.
The equilibrium interest rate will fall.