Economic Principles And Problems A Pluralist Introduction 1st Edition Geoffrey Schneider - Solutions

Using a graph of the market for a public good, use mainstream economic analysis to explain carefully why markets do not tend to provide the optimal quantity of public goods.
Would vaccinations be considered a public good or a quasi-public good?Explain briefly.
How are quasi-public goods different from public goods? Explain.
List the seven categories of public goods. Which category do you think is most important for economic growth? Which category is most important for quality of life of a country’s citizens? Explain briefly and support your answer.
Magdoff and Foster argue that capitalism is fundamentally incompatible with a sustainable economic system. Given what you know about capitalism and how it functions, construct an argument for or against this perspective. Use specific examples to support your answer.
One of the major arguments politicians make against environmental regulations is that they will reduce the number of jobs. Is this a sound argument?Why or why not? Explain using specific examples from this chapter.
Answer the following questions related to Figure 20.5.a. What price and quantity combination would an unregulated market generate?Why would economists consider this outcome inefficient? Explain carefully and make specific references to the graph in your answer.b. What is the socially efficient
Compare and contrast the approaches to climate change taken by the following groups:a. conservative mainstream economistsb. liberal mainstream economistsc. political economists.
Suppose that you are elected President of the United States. Design a set of economic policies to address climate change. Support the approach that you take.
List the various policies that economists advocate for addressing climate change.
How does a carbon tax differ from a cap-and-trade system? Why do many mainstream economists prefer a cap-and-trade system? What are some of the problems that can occur with a cap-and-trade system?
Critically evaluate the approach of environmental economists in determining the optimum level of pollution abatement. Do you think it is appropriate to value human life and environmental services in this way? Why or why not?How might ecological economists respond to this approach?
Compare and contrast ecological economics and environmental economics.Which approach do you find most compelling in addressing the issue of climate change? Explain and support your answer.
Analyze the issue of market failure and government failure and evaluate whether or not the United States strikes the right balance of government and markets. Should the U.S. government intervene more strongly in markets? Or do you think markets are efficient enough and government intervention
Explain why the prices of essential services such as health care and education are increasing faster than the prices of manufactured goods. How can the government deal with this market failure?
Why do unregulated markets work poorly when it comes to common resources or goods that are nonexcludable? Explain and give specific examples.
How are market failure and government failure connected with the problem of moral hazard? How might moral hazard be reduced or eliminated?
Which market failures are created by a lack of property rights? Explain how cap-and-trade and “individual transferable quotas” solve the property rights problem in specific types of markets.
Using a graph, explain why markets lead to inefficient outcomes when a negative externality is present. Also using the graph, explain how the government can internalize a negative externality.
Explain what is meant by “internalizing” an externality and why governments attempt to achieve this goal when externalities are present.
Describe the debate over the use of antitrust laws to prevent mergers and monopolies. Why are many conservative economists untroubled by monopoly power? Why do other economists consider monopoly power to be a major market failure? Which position do you support? Why?
Explain the role of unions in correcting the market failure of unequal bargaining power in the labor market. Do you think the U.S. government should encourage or discourage the formation of unions? Explain your answer briefly.
Which of the eight market failures is the U.S. government least effective in correcting? Why do you think the U.S. government is particularly ineffective in this area?
Construct a table in which you list each market failure, give an example of each one, and list the U.S. government programs designed to correct each market failure.
Which of the eight market failures do you think is most important? Explain your answer.
Do you agree with Baumol and Friedman that antitrust laws should not be used as frequently to regulate large corporations such as Google and Microsoft?Why or why not?
In his book Small Is Beautiful, economist E. F. Schumacher argues that the problem with corporations is their bigness. When corporations become huge and impersonal, they tend to act to maximize profits without concern for people, communities, and the environment. From this perspective, only by
Economist Milton Friedman argues that the only responsibility of corporations is to make profits. Do you agree with his argument? Why or why not?
Write an essay in which you critically analyze the arguments for and against large corporations. Given these arguments, how should the government approach regulating them? Do you think the corporate structure is fundamentally flawed, as argued by many political economists? Or do you think the
Critically analyze Baumol’s argument that large corporations are the central reason for the rapid growth and widespread wealth that is generated in modern developed capitalist economies like the United States.
Critically analyze the argument that corporations are psychopaths.
Using the case studies of corporate misbehavior in this chapter, identify the commonalities between the cases. Taken together, what are the major lessons regarding corporate misbehavior that emerge?
Explain the principal–agent problem and the concept of moral hazard. How are stock options designed to address this problem?
(a) Why do firms in an oligopoly have an incentive to collude? (b) What types of collusion are possible? (c) What does the OPEC case study tell us about the benefits of colluding and the difficulties in maintaining a collusive agreement?
How might your answer to question 7 change if the game were a repeated game instead of a one-time game? Explain. Weis's advertising Low ad expenditures Giant's advertising expenditures Low ad expenditures Weis profits: $250,000 expenditures Giant profits: $250,000 High ad expenditures Wels profits:
The payoff matrix in Figure 17.9 shows the payoffs for two supermarkets, Giant and Weis, who are considering two different strategies: Low advertising expenditures or high advertising expenditures. (a) What is Giant’s best strategy? (b)What is Weis’s best strategy? (c) Does either firm have a
The payoff matrix in Figure 17.8 shows the payoffs for two supermarkets, Giant and Weis, who are considering two different strategies: Low advertising expenditures or high advertising expenditures. (a) Using the payoff matrix, what is Giant’s dominant strategy (if any)? What is Weis’s dominant
In December 2017, McDonald’s announced a new “dollar” menu, which would contain a number of items for sale for only $1. In response, Taco Bell announced it was reducing the price of 20 items to $1. Wendy’s, Burger King, and Carl’s Jr. all began offering similar competing deals. How does
How does the kinked demand curve model explain why prices in oligopolies tend to be sticky?
Pick an oligopolistic industry that you are familiar with and that is not discussed in detail in this chapter. Explain the types of strategic competition we see in the oligopoly you picked.
How does competition in oligopolies differ from competition in other market structures? Explain carefully.
How do oligopolies differ from monopolistically competitive industries?
Suppose that Pronto Restaurant and Deli, operating in the monopolistically competitive restaurant market, currently sells meals for an average price of $12 per meal while producing a quantity of 200 meals per day and incurring average total costs of $15 per meal.a. Draw a graph depicting Pronto’s
Wineries are considered to be in a monopolistically competitive industry.Suppose that the Fero Winery current sells 10,000 bottles of wine per month at a price of $15 per bottle, while incurring average total cost of $10 per bottle.Draw a graph of the Fero Winery displaying this information and
In 2017, the top grossing iPhone mobile gaming apps were Pokémon Go ($2.1 billion), Candy Crush Saga ($1.6 billion), Clash Royale ($1.2 billion), and Game of War: Fire Age ($0.8 billion). There were 783,269 gaming apps available at that time, and the total annual gross revenue from iPhone mobile
The table in Figure 16.5 contains cost and revenue data for Cafe Latte, a local cafe in the monopolistically competitive cafe market. Q = quantity; P = price;TC = total cost; TR = total revenue; MR = marginal revenue; MC = marginal cost; ATC = average total cost.a. Complete the table and determine
What are the major ways in which firms in a monopolistically competitive industry differentiate their products from the products of their competitors?Explain and give examples from an industry other than those that are described in this chapter.
How does monopolistic competition differ from perfect competition? How does monopolistic competition differ from monopoly?
Why do you think many countries and municipalities use state-owned enterprises to supply goods and services in industries that are natural monopolies?Why might a state-owned enterprise be more efficient than a private sector monopoly?
Do you think the government should regulate Google given its near-monopoly on search engines described above? Why or why not? Support your argument.
Determine which of the following monopolistic industries would be best suited for marginal cost pricing instead of average total cost pricing: Sewage, postal service, public transportation, and vaccinations. Explain your answer. Q TC ATC MC P TR MR 0 $16,000 $180 100 23,000 160 200 29,000 140 300
What incentive problems are created by guaranteeing a monopolist a normal profit? How can those incentive problems be addressed by regulators?
The table in Figure 15.13 is cost and revenue information for a day of trash pickup and disposal by the Lewisburg Trash Company (LTC).a. Complete the table.b. Based on the data, if LTC wishes to maximize profits, what price should it charge and what quantity should it produce?c. What are the
Use Excel or another spreadsheet program to construct a graph that plots out demand, marginal revenue, average total cost, and marginal cost curves based on the table in Figure 15.12. Show the firm’s profit-maximizing level of output and the price and quantity that would result from average total
The table in Figure 15.12 shows cost and revenue data for Citizens’ Electric Co., a monopoly that sells power in the Lewisburg, Pennsylvania, area. Q is in millions of kilowatt hours per day.a. Complete the table.b. Based on the table, is Citizens’ Electric a natural monopoly? Why or why not?c.
What will happen in the long run to a monopolist that is earning an economic profit?
Explain the relationship between the demand curve and the marginal revenue curve. Why does a monopolistic firm use marginal revenue instead of price when determining the profit-maximizing level of output?
What are the key differences between the characteristics of a monopoly industry and the characteristics of a perfectly competitive industry? Briefly explain.
Complete the table in Figure 14.12 and answer the following questions.a. What is the profit-maximizing level of output?b. What is the firm’s economic profit or loss at the profit-maximizing level of output?c. If we assume that this firm is typical of firms in the industry and that this firm’s
Groundworks Farm operates in the perfectly competitive market for kale.a. In 2010, Groundworks Farm sold 20,000 bunches of kale for a price of $2 per bunch, while incurring average total costs of $3 per bunch and averagevariable costs of $1 per bunch. Show this situation a graph that includes ATC,
Complete the table in Figure 14.11 and answer the following questions.a. What amount is total fixed cost in this example?b. What is the profit-maximizing level of output in the short run?c. What is the amount of economic profit or loss the firm will earn at the profit-maximizing level of output?
A firm in a perfectly competitive market will earn an economic profit whenever(select the correct answer below and explain your answer):a. P > AVC.b. P = ATC.c. P > ATC.d. P < ATC.
Why should a firm shut down in the short run if the market price falls below the firm’s minimum average variable cost? Explain carefully.
Why is the demand curve for a perfectly competitive firm in the wheat market flat whereas the demand curve for a large firm with market power like Coca-Cola is downward sloping? Explain.
Given the assumptions and characteristics of the mainstream model of perfect competition, how important and useful do you think it is for understanding the functioning of modern economies? Explain, and support your answer using examples.
Why do political economists argue that firms engage in satisficing behavior rather than optimizing behavior? Explain and give examples.
Compare and contrast the political economy theory of the firm with the mainstream economics theory of the firm. Where are they similar? What are the major differences?
Farming is an industry that contains both very small and very large farms.Explain why this might be the case using the concepts of economies of scale and diseconomies of scale.
What would the long-run average total cost curve look like in an industry in which there were no economies of scale and no diseconomies of scale?
Complete the table in Figure 13.14 and then answer the questions afterward.a. Does the table display the laws of specialization and diminishing returns?Why or why not?b. Using the table, explain the relationship between MC and AVC, MC and ATC, and AVC and ATC.c. Using the mainstream model of profit
Explain why economists include a “normal profit” as a normal cost of doing business.
Why does the marginal cost curve always intersect the average total cost curve at its minimum point?
Why does the average total cost curve get closer and closer to the average variable cost curve as quantity (Q) increases?
What would it mean if a firm’s marginal cost curve is always decreasing? What would it mean if a firm’s marginal cost curve is always increasing? Explain carefully.
Do you think the laws of specialization and of diminishing returns apply to a university’s hiring of professors? What are professors “producing”? Will the productivity of each professor improve as they are able to specialize? Will it decline eventually as more professors are hired? Explain
Use the data provided in this chapter to compute a Herfindahl Index for the four largest soft drinks companies and the four largest car companies. What does this information tell us about these two industries? Explain briefly.
Identify which market structure best characterizes each of the markets below.Explain your answer.a. T-shirtsb. Athletic shoes (for field hockey, basketball, tennis, soccer, running, etc.)c. Dog walkingd. Cable television.
Identify which market structure best characterizes each of the markets below.Explain your answer.a. Internet search enginesb. Local bankingc. Driveway snow shovelingd. Online bookstores.
Which of the eight characteristics of markets laid out in Figure 12.1 is most important in determining market structure? Explain and support your answer.
Why does the government regulate monopolies even if they are natural monopolies?
Would Microsoft Windows be considered a natural monopoly? Why or why not?
How do economies of scale influence the amount of competition in an industry?Explain.
Why do we tend to see the most collusion in oligopolistic industries with fewer than four main competitors?
Why are local hair salons considered to be a monopolistically competitive industry? If hair salons in your town were doing extremely well and earning an economic profit, what would you expect to happen to the industry in the long run?
Explain why a firm earning a 5% profit might end up going out of business using the concept of a normal profit.
If firms in an industry with easy entry and exit are earning an economic profit, what can we expect to happen in the long run to the number of firms in the industry? If firms in an industry with barriers to entry are earning an economic profit, what can we expect to happen in the long run to the
Suppose that you are a corn farmer and the market price of corn is $5 per bushel. Explain why you should also charge $5 per bushel of corn rather than a higher or lower price.
Why do political economists believe that power is a key element of supply decisions? Explain and give specific examples.
Compare and contrast the mainstream economics view of supply decisions with the views of political and behavioral economists. In your response, explain what types of questions each approach is trying to answer.
Explain how the firm’s supply curve is derived from the marginal cost curve and the average variable cost curve.
Why do economists include a normal profit in the costs of production?
Suppose that you work for a marketing firm and you are in charge of deciding how many laser printers to buy for your work team of 50 people. How would the laws of specialization and diminishing returns apply to your purchases of additional laser printers? Explain.
The table below shows information on labor and output for one week for a firm that manufactures the Slinky toy. The wage rate is $800 per week.a. Complete the table in Figure 11.8.b. Does this table display the law of specialization and the law of diminishing returns? Explain briefly.c. If the
Using your own behavior and the behavior of people close to you, find examples of anchoring, overoptimism, loss aversion, and status quo bias that are different from those given in the book. How widespread do these issues seem to be? Do they affect most human behavior most of the time, or are these
The results of the ultimatum game and the Haifa childcare experiment demonstrate that most people value fairness and reciprocity in their dealings with each other. Looking at the transactions that you have been involved in or observed, do you see similar examples of fairness and reciprocity on
In your household and other households that you have observed, how does gender affect major decisions on purchases of goods and services? Explain and give examples.
How do the consumption habits on your campus or in your community relate to Veblen’s concept of pecuniary emulation and the concept of the bandwagon effect? Explain and give specific examples.
Give an example of a Veblen good that is different from the examples given in the book. Explain why this is considered to be a Veblen good.
If the price of energy increases dramatically as we run out of fossil fuels and this increases the price of storing and shipping goods significantly, what effect is likely to happen to the price elasticity of supply curves? What impact will this have on the equilibrium prices and quantities of
The income elasticity of the demand for designer clothes is 2.5. What will happen to the quantity of designer clothes demanded if the economy hits a recession and income (GDP) falls by 5%? Explain and show your work.

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Economic Principles And Problems A Pluralist Introduction 1st Edition Geoffrey Schneider - Solutions

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