Tag: Economics – Others

Please give me the full answer and make sure your answer is correct Consider the labor market for halrstyllists In two small towns, each with only one hair salon, such that the owners of the salons have monopsony hiring power for hairstyllsts. The following graphs depict the labor supply, marginal expense of labor ( \( M E_{L} \) ), and labor demand in these markets.Complete the following table with the profit-maximizing quantity of labor each salon will hire, along with the wage it will pay for each hour of labor.In Town 1, the salon pays a wage that is _ \( r \) the marginal value product of the final unit of labor hired, whereas In Town 2, the wage is . the marginal value product of the final unit of labor hired.The outcome in Is farther from that of a competitive market, given that the supply of labor is elastic (at the market equillibrium) with respect to changes in the wage.
Answer
General rule for a monopsonist: choose employment where marginal expense of labor (ME_L) equals the value of the marginal product of labor (labor demand, MRP). The wage paid is the corresponding value on the labor supply curve at that employment level. Because the supply curve lies below ME_L for a monopsonist (except in the perfectly elastic case), the wage paid is typically less than the marginal value product at the chosen employment level.
Town
Profit-maximizing quantity of labor (Q*)
Wage paid (W*)
Relation of W* to marginal value product (MRP at Q*)
How far from competitive outcome
Town 1
Q1 = the quantity where ME_L intersects labor demand (MRP). (This is less than the competitive quantity.)
W1 = the wage given by the labor supply curve at Q1.
W1 < MRP at Q1 (wage is less than the marginal value product). Farther from the competitive outcome because the supply curve is relatively inelastic (so the monopsonist can reduce employment substantially below the competitive level and pay a much lower wage). Town 2 Q2 = the quantity where ME_L intersects labor demand (MRP). (This is higher than Q1 and closer to the competitive quantity.) W2 = the wage given by the labor supply curve at Q2. If the supply is highly elastic (near horizontal), W2 ≈ MRP at Q2; in other words, the wage is equal to (or much closer to) the marginal value product. Closer to the competitive outcome because the supply is elastic, so the monopsonist’s distortion is smaller and the wage and employment are nearer the competitive levels. Summary: For both towns the monopsonist hires where ME_L = MRP and then pays the wage given by the supply curve at that employment. In Town 1 the wage is less than the marginal value product and the outcome is farther from the competitive benchmark (supply is inelastic). In Town 2 the wage is much closer to (or equal to, if supply is perfectly elastic) the marginal value product and the outcome is closer to the competitive market.

5. Problems and Applications Q4Consider the market for mobile applications, smartphones, and conventional phones.
For each pair, identify whether they are complements or substitutes:
Pairs of Goods and Services
Complements
Substitutes
Mobile applications and smartphones
Mobile applications and conventional phones
Smartphones and conventional phones
Suppose a network externality reduces the cost of developing cell phone applications. Show the effect of this change on the market for cell phone applications. Next, show the effect the previous change in the market for cell phone applications has on the market for conventional phones. Finally, show the effect the previous change in the market for cell phone applications has on the market for smartphones.

In our audiovisual lecture we discussed that two politicinas wrote the Community Reinvestment Act of 1995, which forced banks to loosen their lending standards. That law set the stage for the disasterous results of the sub-prime mortgage crisis. Then when the entire economy was ready to collapseln 200 t due to these wub prime mortgaget, these same two pelitielans wrote a new bill to try to repair all the damage that was done. That bill was the Wall Street Reform and Consumer Protection Act of 2010.
Guestion: Which two polticians were responsible for starting the sub-arime mortgape messt.
Multiple Choice
Senator IErabeth Wahen and Aepresentalive Maxine Waters
Senator Bernie Sanders and Representative Nancy Peloui
The question is wrong R was the Federal Reserve Bank that wrote the onginal Community Reimerwment Act of thas.
Senator Ciris Dodd (D-Connecticut and Represenkative Barnet Frank (D-Massachanetts)

6 of 25 This test: 25 point(s) possible This question: 1 point(s) possible
Suppose the random variable Y has a mean of 42 and a variance of 100. Let Z=11002(Y-42).
Show that μZ=0. (Round your responses to two decimal places)
Show that σz2=1. σZ2=var,(Y-]rY2=1 (Round your responses to two decimal places)
7 of 25 This test: 25 point(s) This question: 1 point(s)
The dummy variable trap is an example of:
perfect multicollinearity.
imperfect multicollinearity.
something that does not happen to university or college students.
something that is of theoretical interest only.

How does the French approach to claiming colonial land differ from the English approach?
A. The French purchased all of their land directly from their fellow Catholic ally, the Spanish, whilst the Protestant English openly defied such arrangements and took their territory through conquest.
B. The English avoided any interaction with Native tribes and only claimed uninhabited land, whereas the French would oftentimes force the Natives to sign away their homes in shady land deals.
C. The French used marriage alliances with prominent Native Americans to solidify land claims. In contrast, the English forbade their inhabitants from such practices and instead gained land by driving out the Indigenous inhabitants from a region.
D. The English settled and developed the land (cutting trees, building farms), while the French typically just claimed areas via rivers without extensive colonization.

Initially, there are 6 workers in the origin country and 4 workers in the destination country. Assume thatlabor supply is perfectly inelastic in both countries (that is, that labor supply can be represented through a vertical line).
Consider first the case in which individuals are not able to change their country of residence.What would be the equilibrium wage in the destination and in the origin countries?
Consider next the case in which workers can freely migrate across countries (at no cost).What would be the equilibrium wage in the destination and in the origin countries? Howmany workers (if any) would migrate from the origin to the destination country?The government in the destination country is worried about the potentially negative effects ofimmigration on the labor market. To address this issue, the government is considering the introduction ofa

Each of the scenarios will result in either a shift in the supply curve for labour or a change in the quantity of laboer sapplied. For each scenario, please indicate whether the change will affect supply or quantity supplied and in which direction the change will occur.
a.
Hot springs are discovered outside of Golden, Colorado, leading to the construction of several new ski resorts. These resorts offer many personalized services and require a large staff to meet customer needs. The increase in ski resorts leads to a(n) ◻ in the ◻
b.
The federal government adopts a new visa policy for guest workers seeking jobs in the United States. As a resalt, 30% more work visas are granted than before, a change expected to be permanent. The increase ia the mater of visas leads to a(n) ◻ in the ◻
c.
Health expert Richardo Simmonetz popularizes a new diet that requires people to cat only fried chidien for six

Question content area
Part 1A retail store offers a marketing program in which they suggest that consumers try the product for 30​ days, and if they​ don’t like​ it, send it back. What behavioral economic concept is at issue​ here?
Part 2
Saliency since it will serve as a signal to consumers that the product may not be very high​ quality, but that it can be returned if it is far below your lowest required quality needs.
Loss aversion since people will likely return the product before the 30 days are up to avoid being stuck with an item they may not fully like.
New goods bias since consumers will always value new goods over older goods. This type of promotion will not work since consumers will likely return the product to get a newer item.
Endowment effect since once the item is in their house they will feel ownership and value it​ more, making them less likely to return it.

Monetary Policy in Mokania
Mokania has had inflation of 15% for many years. Molania establisbes a new central bank, the Bank of Mokania, with the hopes of reducing the inflation rate. Refer to Monetary Policy in Mokania. The Bank of Molana publicines that it iatends to reduce the inflation rate to 5%. If it actually reduces inflation to 3% and people were expecting inflation to fall only to 8%, then
unemployment falls but it would have fallen by less if the Rusk of Molana lad reduced inflation to 5% rather than 3%.
unemployment rises but it would have risen by more if the Busk of Molania had reduced inflation to 5% rather than 3%.
usemployment rises but it would lave risen by less if the Resk ef Mokanis had reduced inflation to 5% rather than 3%.
unemployment falls but it would have falles by more if the Busk of Mokueia lad reduced inflation to 5% rather than 3%.

Question 2 (13 points)Suppose that a Chinese solar panel manufacturer has an upward sloping marginal cost function given by MC=10Q where Q is the total number of solar panels produced by this firm. Denote the number of panels sold in the Chinese market by QH and the number of panels sold in the US market by QF. The firm faces a downward sloping demand curve in the Chinese market given by PH=750-5QH. It faces a horizontal demand curve in the US market at a price of 500 . That is, it can sell any number of panels in the US market at that price.
a) (4 points) How many panels will the firm sell in each market?
b) ( 2 points) What is the profit maximizing price of the panels it charges in the Chinese market?
c) (3 points) Is the price in the Chinese market higher or lower than in the US market? Will this qualify as dumping?
d) (4 points) Show the results diagrammatically.