Unit 3 Homework Assignment:
1. Review Slides 10-12 in your Attend section. Suppose a local coffee shop knows that its elasticity of demand is 0.2. Would you recommend that the coffee shop increase its price by 20%? Why or why not?
2. Review Slides 10-12 in your Attend section. Suppose a cigarette manufacturer knows that its elasticity of demand is 1.3. Would you recommend that they raise price by 20%? Why or why not?
3. Would government be better off taxing gasoline or Nike tennis shoes? Use the concept of elasticity (or inelasticity) of demand to defend your choice.
4. Define the following:
a. Consumer surplus
b. Producer surplus
c. Total welfare
d. Deadweight loss
5. Refer to Slide 18 in the Attend section. Explain the effects of a tax on consumer and producer surplus. Explain what happens to total welfare when government levies a per-unit tax on a good. Use the concept of deadweight loss in your explanation.
6. What are the two characteristics that must be met for a good to be considered a “public good?” Give an example of the “free rider” problem and explain why the good or service is subject to this problem.
*****In order to complete this assignment, I will need to come back on tomorrow evening and post the “Attend Slides” for the homework portion.*******
Unit 4 Discussion:
Find an example of price discrimination (other than those given in the Attend section). You can find an article or use an example from your own experience.
***Will post this on next week***
Unit 4 Homework assignment:
1. Choose a market or industry that you think is close to perfectly competitive. Then, explain whether or not your choice meets each of the characteristics shown in Slide #5 of the Attend. Is the market really perfectly competitive? Can absolute perfect competition exist in the “real world?”
2. Take a look at the latest annual report for the Tennessee Regulatory Authority at:
What types of industries does TRA regulate? Choose a specific company that would fall within one of those industries. Why is this firm (and others within the industry) regulated?
3. Do each of characteristics of monopoly shown on Slide #18 in the Attend section apply to the firm you have chosen in question #2? Explain why or why not each characteristic would or would not apply to your firm.
*****Will post the slides to complete this assignment on this week****
Unit 5 Discussion:
Policy Making Exercise:
Using what you have learned in this unit, choose a FISCAL policy that you would recommend to help an economy that is in a recession. You should not choose a monetary policy (i.e. interest rate manipulation, selling of bonds, or printing of money).
****Will post the classmate response in 2 weeks***
Unit 5 homework assignment:
1. Compare and contrast the three types of unemployment that are covered in Slides 8-10 of the Attend section. If you were a policy maker which type of unemployment would be most bothersome to you?
2. What costs are associated with inflation? Explain at least 3 different costs that individuals or businesses experience when inflation rises.
3. Explain why transfer payments are not included in GDP
4. Using the components of GDP covered in section 22.1 of your text, explain which component would be affected by the following (only one component should be chosen for each scenario):
a. You buy an Italian purse.
b. You buy a new house.
c. New lanes are added to Interstate 40.
d. You buy groceries.
e. You buy a new washer and dryer.
5. Suppose the economy is at a macroeconomic equilibrium as is shown on Slide 40 of the Attend section. The government decides to give every taxpayer a $500 tax refund.
a. What happens to the aggregate demand curve after the refund?
b. What happens to the price level after this change?
c. Is real wealth increased or decreased as a result of the refund?
6. Review Section 22.7 in your text. Compare and contrast the results of the Classical Model and the Keynesian model after an expansionary policy. Keep in mind that the economy is in a recession and not at full employment. Address the following:
a. The shape of the aggregate supply curve in each model in both the long-run and short-run.
b. The effect of an expansionary policy on aggregate demand in both the long-run and short run.
c. The effect of an expansionary policy on the price level in both the long-run and short-run
|Due By (Pacific Time)||11/11/2015 11:13 pm|
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