Category: Economics

Publicly held debt is the portion of the national debt that is held outside the federal government and the Federal Reserve System.
In June 2007, the publicly held debt as a percentage of total national debt was .In June 2007, the percentage of the U.S. national debt held by foreigners was .
The fraction of the national debt held by foreigners will eventually need to be repaid to foreigners, thereby reducing the collective purchasing power of Americans.
Between 2007 and 2011, the fraction of the national debt held by foreigners .
The absolute level of the debt does not necessarily provide a clear indication of a nation’s debt burden. Thus, economists often look at relative measures of the national debt.
One possible relative measure of the national debt is the federal debt held by the public (outside the federal government and the Federal Reserve) as a percentage of GDP.
In 2007, publicly held debt was of GDP. Between 2007 and 2011, publicly held debt as a percentage of GDP .

Suppose that Manuel is deciding whether or not to buy a pair of sandals that he has been researching online, and also the best place to make his purchase. Three different stores in the area sell the sandals he likes, but some stores are more convenient for Manuel to reach than others. One option is a local store located only 15 minutes away from where he works, where they charge a marked-up price of $139 for the sandals:
Store
Travel Time Each Way (In minutes)
Price of Sandals (In dollars)
Local Store
15
139
Different Neighborhood in Town
30
104
Rural Outlet
60
73
Manuel earns an hourly wage of $50 at his job. In order to purchase his sandals he will have to take time off work, so each hour away from his job costs his $50 in lost income. Assume that Manuel’s travel time is the same each way (to and from the store) and that it will take his 30 minutes once he reaches a store to complete his shopping. Assume throughout the question that Manuel incurs no additional costs other than the sandals, such as

➤ How can adverse aggregate supply factors cause both inflation and recession?
Adverse supply shocks, like rising oil prices, higher wages, or lower productivity, increase production costs and reduce output. Firms pass higher costs into prices while cutting supply, so inflation and falling real GDP occur together. This simultaneous outcome is known as stagflation and challenges standard stabilization tools.

The effect of negative externalities on the optimal quantity of consumption. Consider the market for pharmaceuticals. Suppose that a pharmaceutical factory dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the factory. Producing additional pharmaceuticals imposes a constant per-unit external cost of $210.
The following graph shows the demand (private value) curve and the supply (private cost) curve for pharmaceuticals. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $210 per unit.
The market equilibrium quantity is q units of pharmaceuticals, but the socially optimal quantity of pharmaceuticals production is q units.
To create an incentive for the firm to produce the socially optimal quantity of pharmaceuticals, the government could impose ____ per unit of pharmaceuticals.

Suppose an economy produces two goods, food and machines. This economy always operates on its production possiblilities frontier. Last year, it produced 1000 units of food and 47 machines. This year it experienced a teclanological advance in its machine-making induary. As a result, diis year the sociely wasts to produce 1050 units of food and 47 machines. Which of the following statements is correen?
a. Because the technological advance occurred in the machine-making industry, it will not be possible so increase food production without reducing machine production below 47 .
b. Because the technological advance oocurred in the machine-making industry, increases in output can only occur in the machine industry.
c. In oeder to increase food production in these circumanoes without relacing machine production, the economy must reduce inefficiencies.
d. The technological advance redaced the amount of nesources needed to produce 47 machines, so these resources could be used to produce more food.

Some firms sell the same product under two brand names at different prices. For​ example, although the Chevy Tahoe and the GMC Yukon are virtually​ twins, the 2021 Yukon sells for​ $1,400 more than the 2021 Tahoe. Give an asymmetric information explanation as to why the firm might use pairs of brand names and why one product might sell for more than the other.
Part 2
A firm might use a pair of brand names (instead of one) to sell the product for more under one of the brand names because
Part 3
consumers don’t know the same good is sold under two brand names
consumers and the firm have an equal amount of information about the brands
consumers are homogeneous and are not price sensitive
consumers have more information about quality than the firm
it is easy to determine whether two brands are the same good

An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery. The first development concerned side effects from the​ surgery, including blurred vision. The second development was that the companies rentingeyeminus−surgerymachinery to doctors had reduced their charges. In the market for laser eye​ surgeries, these two developmentsPart 2A.decreased demand and increased​ supply, resulting in a decrease in both the equilibrium price and the equilibrium quantity of laser eye surgeries.B.decreased demand and decreased​ supply, resulting in a decrease in the equilibrium quantity and an increase in the equilibrium price of laser eye surgeries.C.decreased demand and increased supply resulting in an increase in both the equilibrium quantity and the equilibrium price of laser eye surgeries.D.decreased demand and increased​ supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries.

b. If an industry is perfectly competitive, the equilibrium price will be at point q, HLR q, c.
If an industry is perfectly competitive, consumer surplus is the triangle area of d.
If an industry is a single-price monopoly, consumer surplus is the triangle area of points e.
If the industry is a single-price monopoly, total quantity produced by the monopolist will be at point ABF q, f.
If industry is a single-price monopoly, price charged by the monopolist will be at point BFHE g.
The rectangle area that is the single-price mosopolist’s profit is q, (Hint, recall that there are no fixed costs).
h. The triangle area that represents the deadweight loss to society that is a result of the price and quantity offered by the single-price monopoly is i.
If the monopolist can price-discriminate perfectly, the quantity that the perfectly pricediscriminating monopolist produces is at point q, j.
If the monopolist can price-discriminate perfectly, the range of prices that the perfectly price and q,

Healthcare reforms enacted in 2010 expressly allow insurance companies to:
none of the choices.
spend less than 80% of premiums on benefits and quality improvement.
impose lifetime and annual limits on care.
deny coverage for preexisting conditions.