Tag: Economics – Others

DATA:Usage Income Rural College 168 146 0 0 181 198 0 1 135 193 1 0 32 45 0 0 228 220 1 0 76 63 0 1 45 45 0 1 125 83 0 1 19 59 0 1 50 80 0 1 198 165 0 0 238 162 0 1 45 63 0 1 58 53 1 1 221 204 0 1 213 101 1 1 155 80 0 1 91 44 1 1 268 215 1 1 160 103 0 1 161 138 0 0 138 175 0 0 177 65 0 1 143 104 0 1 203 175 0 1 160 118 0 1 272 205 1 1 65 31 0 1 200 116 0 1 110 57 0 1 150 96 0 1 100 166 1 0 185 110 0 1 240 155 1 1 298 208 1 1 116 85 0 0 105 172 1 0 93 39 0 1 195 168 0 1 136 98 1 0 200 137 1 1 218 215 0 1 114 94 0 0 176 138 0 1 155 79 1 1 75 33 0 1 218 188 0 0 194 135 0 1 288 198 0 1 291 212 1 1 119 116 0 1 188 121 0 1 23 23 0 0 84 50 0 1 108 153 1 1 123 195 0 1 61 45 1 0 28 21 0 0 56 124 1 0 106 111 0 1 156 121 0 1 285 190 0 1 278 215 0 1 95 97 0 0 49 62 1 1 6 50 1 0 250 183 0 1 262 181 0 1 90 55 0 1 166 96 0 1 137 150 1 0 163 136 0 0 263 214 1 1 100 71 1 1 170 199 0 0 188 206 1 0 59 26 1 1 9 65 1 0 55 53 0 1 104 31 0 1

The purpose of macroeconomic policy is to:A) bring unemployment closer to the natural rate.B) reduce the severity of recessions.C) rein in excessively strong expansions.D) bring unemployment closer to the natural rate and to reduce the severity ofrecessions.
3. Keynesian economics stressed:A) total spending.B) the self-regulating power of free markets.C) the long run.D) that the Depression should run its course to bring down the high cost of living.
4. One normally expects that unemployment increases while aggregate output andaggregate incomes decrease during:A) an expansion.B) when government intervention occurs.C) a recession.D) at the peak of the business cycle.
5. Which of the following is false? Gross domestic product:A) is aggregate output.B) is the total production of final goods and services.C) grows during an expansion.D) is the total production of all final and intermediate goods and services.

Question 4 of 23
Suppose there are three internet service providers (ISPs) in a local market which have been present for a long time and generate healthy economic profits. Suppose that a startup fiber company enters the market. Initially, the startup captures many customers from the other ISPs but soon experiences financial problems due to the huge upfront costs associated with creating a fiber network. In order to generate more revenue, the startup decreases its price. In response, the established firms all offer price-match guarantees and an additional 5% off any matched price. The older ISPs run the price matching scheme even after the startup decides to return to its original price. Eventually, the startup goes bankrupt and the older ISPs return to the initial pricing regime.
What type of strategy did the three existing ISPs employ?
Trembling-hand perfection
Trigger strategy / Grim trigger
Subgame perfection
Tit-for-tat

Question
Based on this model, households earn income when purchase in factor markets.Suppose Maria earns $575 per week working as an interior designer for Ourhouse. She uses $10 to take a spin class at Silver’s Gym. Silver’s Gym pays Kevin $300 per week to work as a trainer. Kevin uses $225 to purchase furniture from Ourhouse.
Identify whether each of the following events in this scenario occurs in the factor market or the product market.
Event
Factor Market
Product Market
Kevin spends $225 to purchase furniture from Ourhouse.
Maria earns $575 per week working for Ourhouse.
Maria spends $10 to take a spin class.
Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply.
Maria’s labor
The $300 per week Kevin earns working for Silver’s Gym
The $225 Kevin spends to purchase furniture from Ourhouse
The spin class Maria receives

(10 points) There is a famous game which is called “Prisoners’ Dilemma”. In this game, two people are arrested for a severe crime. The district attorney doesn’t have enough evidence and would need a confession to get a conviction. She separates the two individuals and offers them the same deal as follows:
If you confess and your partner doesn’t, I can give you a reduced sentence of 1 year, while your partner will receive 10 years.
If you both confess you will each get 3 years.
They both also know that if neither confesses they will still end up being convicted to a two year sentence for other crimes they have committed.
Note that here the numbers are the number of years in jail, so smaller is better for this particular case.
Payoff matrix (Row player, Column player)
Confess
Not Confess
Confess
3, 3
1, 10
Not Confess
10, 1
2, 2
(a) Does each player in the game have a dominant strategy? If so, what are they?
(b) Solve for the Nash Equilibrium

Price discrimination requires the firm to
Group of answer choices
separate customers according to their willingness to pay.
differentiate between different units of its product.
engage in arbitrage.
use coupons.
Many movie theaters allow discount tickets to be sold to senior citizens because
Group of answer choices
senior-citizen laws mandate such discounts.
efforts of goodwill show community respect and win loyal patrons.
the theaters are profit maximizers.
senior citizens usually comprise a solid portion of those who voice their opinions.
Which of the following is an example of price discrimination?
Group of answer choices
Nabisco provides cents-off coupons for its products.
Amtrak offers a lower price for weekend travel compared to weekday rates on the same routes.
Hotel rates for AAA members are lower than for nonmembers.
All of the above are correct.

The above figure shows the market for DVDs. The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.
After this price ceiling is in effect and taking account of the resources lost in search, consumer surplus equals
A) $400,000.
B) $200,000.
C) $180,000.
D) $100,000.
After this price ceiling is in effect, producer surplus equals
A) $900,000.
B) $400,000.
C) $200,000.
D) $100,000.
After this price ceiling is in effect, deadweight loss equals
A) $1,600,000.
B) $200,000.
C) $800,000.
D) $1,800,000.

As discussed in class: There are three major labor market problems that can have a negative impact and likely hinder a worker’s ability to earn an income that is above the poverty threshold. Which of the following is NOT one of those three labor market problems?
Question 14 options:
periods of unemployment; in that, the worker may work in a service industry that is very vulnerable to economic downturns.
involuntary part-time employment; in that, the worker may work for a day care center that had to reduce the number of employees needed and the hours they work due to the Pandemic.
low earnings; in that, the worker may only earn minimum wage or less (a waitress who only earns tips and not a base wage)
Ivy league education; in that, having an ivy league education (Yale, Harvard, Princeton) causes problems in the labor market because businesses do not want to hire graduates from those schools.
Question 15 (1.5 points)

Show me the steps to solve 5.
Home produces two goods, computers and wheat, for which capital is specific to computers, land is specific to wheat, and labour is mobile between the two industries. Home has 100 workers and 100 units of capital but only 10 units of land.
a. Draw a graph with the output of wheat on the vertical axis and the labour in wheat on the horizontal axis. What is the relationship between the output of wheat and the marginal product of labour in the wheat industry as more labour is used?
b. Draw the production possibilities frontier for Home with wheat on the horizontal axis and computers on the vertical axis.
c. Explain how the price of wheat relative to computers is determined in the absence of trade.
d. Draw a figure with the amount of labour used in wheat measuring from left to right along the horizontal axis and the amount of labour used in computers moving in the reverse direction.

Many municipalitles are concerned about the environmental Impact of plastic bags, which often end up as litter, clogging drains, and hanging from tree branches. A town is considering whether to Impose a tax on plastlc bags to be collected at the store or a per person quota. CIndy and Carl are two average clitizens who both use plastlc bags when they go grocery shopping. Plastic bags are currently free when they shop. The figures below show each Individual’s demand curve for plastic bags. (A) Quota (b) tax Price Quantity of plastic bags
Instructions: Enter your answers for quantity as a whole number. Round your answers for price to two decimal places.
a. Under the quota, the willingness to pay for the last bag used for Cindy is $ and for Carl, $
b. Under the tax, Cindy will use bags and Carl will use bags. The willingness to pay for the last bag used for Cindy is $ and for Carl, $