Tag: Economics – Others

A case study in the chapter describes a phone conversation between the presidents of American Airlines and Braniff Airways. Let’s use game theory to analyze the interaction between the two companies. Suppose that each company can charge either a high price for tickets or a low price. If one company charges \( \$ 300 \), it earns low profits if the other company also charges \( \$ 300 \), and high profits if the other company charges \( \$ 600 \). On the other hand, if the company charges \( \$ 600 \), it earns very low profits if the other company charges \( \$ 300 \) and medium profits if the other company also charges \$600.
Complete the following decision box for this game. American’s profits are on the left in each situation, Braniff’s on the right.
Braniff: High Price
Braniff: Low Price
American: High Price
medium, medium
very low, high
American: Low Price
high, very low
low, low
The Nash equilibrium outcome in this game is for American to set a low price and for Braniff to set a low price.
True or False: Consumers would lose if the two airlines collude to earn higher profits than those given by the Nash equilibrium.
True
False

Suppose that Alex, an economist from a research facility in Washington, and Becky, another economist from an investigative reporting group, are both guests on a popular science podcast. The host of the podcast is facilitating their debate over budget deficits. The following dialogue represents a portion of the transcript of their discussion:
Becky:
Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation.
Alex:
I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.
Becky:
I actually feel that raising the top income tax rate would reduce the budget deficit more effectively.
The disagreement between these economists is most likely due to differences in underlying assumptions. Despite their differences, with which proposition are two economists chosen at random most likely to agree?
Lawyers make up an excessive percentage of elected officials.
Minimum wage laws do more to harm low-skilled workers than help them.

Following a report of higher prices (inflation) in country A (the domestic currency, CA), the balance of payments re-equilibration occurs in which order?
The DC depreciates from the financial account
The foreign interest in DI decreases
Foreign agents increase their interest in domestic investment (DI)
The relative price (RP) of domestic investment (DI) increases (i.e. it takes more FC to buy the DC to invest in the same amount of DI)
The DC depreciates from the current account
Foreign agents decrease their demand of the domestic currency (DC) in the FX market that was used to invest in DI
The relative price (RP) of domestic investment (DI) dereases (i.e. it takes less FC to buy the DC to invest in DI)
Foreign agents increase their demand for the domestic currency (DC) in the FX market to invest in domestic investment (DI)
The DC appreciates from the financial account

Question 3
If Japan does not have a comparative advantage in producing rice, the consequences of adopting a Japanese policy reducing or eliminating imports of rice into the country would include:
Japan will be able to consume a combination of rice and other goods beyond their domestic production possibilities curve.
the real incomes of Japanese rice producers would rise, but the real incomes of Japanese rice consumers would fall.
the real incomes of Japanese rice consumers would rise, but the real incomes of japanese rice producers would fat.
the price of rice in Japan will fall.
Question 4
Tariffs result in a decrease in consumer surplus because:
the price and the quannty consumed of the protected good increases.
the price and the quantity consumed of the prosected good decreases.
the price of the protected good increases and quanctity consumed decreases.

The descriptions give the responses of four individuals to Statistics Canada. Mollie just graduated from university and is now looking for work. She has had three job interviews in the past month. George works in an automotive assembly plant. He was laid off six months ago as the economy weakened. He expects to return to work in several months when national economic conditions improve. Jeanette worked as an aircraft design engineer for a company that produces military aircraft until she lost her job last year when the federal government cut defence spending. She has been looking for similar work for a year but no company seems interested in her aircraft design skills. Ryan lost his job last year when his company downsized and laid off middle-level managers. He tried to find another job for a year, but was unsuccessful and quit looking for work.
Refer to the above information. Which individual would be included in the calculation of the full-employment unemployment rate?
Multiple Choice
1 only
2 only
1 and 3
2 and 4

Supply and Demand – Demand and Supply for Higher Fducation: A Focus on Institution Types
In 2000 , enrollment at private for-prodit institutions represented approximately 3% of toeal enrollment at postsecondary institutions. In 2000, enrollment at private for-profit institutions jumped to approximately 5% of total enrollment.
Coesider what factors might explain why private for-profit institutioes have seen higher enrollment growth rates over the past two decades than other categories of postsecondary institutions.
A possible explanation is that
increased demand for education at public institutions has made such institutions unaffordable.
they offer subsidies to students who are in-state residents.
more students are seeking postsecondary degrees at all types of institutions for higher learning.
they lend to target working and nontraditional students who are seeking more job-specific degrees.
ENG103074$320日2:

What are the three basic functions of money? Describe how high rates of inflation can impactmoney’s ability to perform each of the three functions. (3 points)
2. Comparing money to a barter system, why do you think a barter system may seem inefficient,while money. (3 points)
3. Select a country of your interest and find its most recent data on either M1 or M2 (moneyaggregates you studied in this module; the quantity of money circulating in the economy), aspercentage of GDP. (2 points)
Response Post Prompt4. Read the posts of your peers and respond to at least 1 other learner’s response to one of thequestions above. Your response is expected to be substantive in nature and focus on the topicscovered. In your response, do at least one of the following: (2 points)
* Ask a probing question.
* Offer a suggestion.
* Elaborate on a particular point.
* Provide an alternative perspective.
* Challenge herhis position.
Your responses should be substantive and be 3-5 sentences in length.

1 – 8. (2 points each; 16 points total) These questions ask you to consider different factors which might influence the value of the U.S. dollar vs. the Euro. Assume that both the U.S. and “Eurozone” countries (e.g., the group of EU countries that use the Euro) are 1) both “large countries” in foreign currency markets and thus can influence each others’ currency values, and 2) both have market‐determined currency values. Each of the changes below will result in either an appreciation or depreciation of the U.S. dollar versus the Euro. Indicate, with (a) = appreciation, or (b) = depreciation, what happens to the U.S. dollar’s value relative to the Euro as a result. (Note: in each case, assume that other determinants and the values of other currencies are unchanged).
a = Appreciation of US$ vs. Euro (€)
b = Depreciation of US$ vs. Euro (€)
Question: Eurozone countries impose severe new import restrictions as part of their pursuit of more protectionist trade policies.
Group of answer choices
(a)
(b)

Four students are deciding whether or not to contribute to their group project (it is a zero/one decision, either they contribute or they do not, there are no other options). For each student, the cost of contributing to the project is 5 utils. But for each student who contributes, all four of them will benefit from an increase in their training and the appreciation by their teacher of the work, so they will each gain 3 utils. Read the following statements and select the correct one(s).
Question 12Answera.
a.If a student is selfish, but others are altruistic, she has a dominant strategy to contribute.
b.If all students are altruistic, each has a dominant strategy to contribute.
c.If a student is selfish, but others have a possibility to punish non-contributors after the project is done (say by not talking to her any more), then she may choose to contribute.
d.If all students are completely selfish the dominant strategy equilibrium is that all of the students contribute since they each receive a private benefit to contributing.

Read the following article: Tesla Has Reduced the Cost of Manufacturing its Cars by 57% Since 2017 (tesmanian.com)Then respond to the questions below:
1. Tesla’s Rapid Growth:What do you think are the key factors that helped Tesla grow from a small start-up into the most valuable automaker in history? Refer to specific points from the article and any broader industry knowledge you have.
2. Profitability – Accounting vs. Economic:When the article mentions Tesla’s “profitability,” is it referring to economic profit or accounting profit? What’s the difference between the two, and why does that distinction matter for evaluating a company’s success?
3. Negative Profits and Survival:Most other strictly EV companies (e.g., Rivian, Nikola, Polestar) have yet to post a profit, and a number of others have already gone bankrupt (e.g. Lordstown Motors, Fisker). How long can a company operate with negative accounting profits? What are the main factors that determine whether or not these companies survive during this period?