Microeconomics 15th Canadian Edition Campbell R. Mcconnell, Stanley L. Brue, Sean M. Flynn, Thomas P. Barbiero - Solutions

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1.1. Explain whether each of the following events represents (i) a shift of the supply curve or(ii) a movement along the supply curve.a. More homeowners put their houses up for sale during a real estate boom that causes house prices to rise.b. Many strawberry farmers open temporary roadside stands
1.1. Explain whether each of the following events represents (i) a shift of the demand curve or (ii) a movement along the demand curve.a. A store owner finds that customers are willing to pay more for umbrellas on rainy days.b. When XYZ Telecom, a long-distance telephone service provider, offered
1.) How the supply and demand curves together determine a market's equilibrium price and equilibrium quantity
1.) The factors that determine the demand for, and supply of, a good
1.What the demand curve and the supply curve are
1.10. The accompanying table illustrates annual salaries and income tax owed by five individuals, Apart from the fact that they receive different salaries and owe differ-ent amounts of income tax, these five individuals are otherwise identical.Annual Income Name Annual salary tax owed Susan $22 000
1.7. The accompanying table shows the relationship between workers' hours of work per week and their hourly wage rate. Apart from the fact that they receive a different 10 hourly wage rate and work different hours, these five workers are otherwise identical.Quantity of labour Wage rate Name (hours
1.5. For each of the accompanying diagrams, calculate the area of the shaded right triangle.Panel (a)Panel (b)Y y5 100 480 360 240 120 01 2 3 4 X0 5 10 15 20 25 X Panel (c)Panel (d)y y50 10 40 830 620 410 21 010 20 30 40 50 X 01 2 3 4 5 x
1.3. In the accompanying figures, the numbers on the axes have been lost. All you know is that the units shown on the vertical axis are the same as the units on the hori-zontal axis.Panel (a)Panel (b)y yx Xa. In panel (a), what is the slope of the line? Show that the slope is constant along the
1.1. Study the four accompanying diagrams. Consider the fol-lowing statements and indicate which diagram matches each statement. Which variable would appear on the horizontal and which on the vertical axis? In each of these statements, is the slope positive, negative, zero, or infinity?Panel
1.15. The mayor of Gotham City, worried about a potential epi-demic of deadly influenza this winter, asks an economic adviser the following series of questions. Determine whether a question requires the economic adviser to make a positive assessment or a normative assessment.a. How much vaccine
1.13. Evaluate the following statement: "It is easier to build an economic model that accurately reflects events that have already occurred than to build an economic model to forecast future events." Do you think this is true or not? Why? What does this imply about the difficulties of building good
1.11. A representative of the Canadian clothing industry recently made the following statement: "Workers in Asia often work in sweatshop conditions earning only pennies an hour. Canadian workers are more produc-tive and as a result earn higher wages. In order to preserve the dignity of the Canadian
1.10. Your dormitory roommate plays loud music most of the time; you, however, would prefer more peace and quiet.You suggest that she buy some earphones. She responds that although she would be happy to use earphones, she has many other things that she would prefer to spend her money on right now.
1.9. An economist might say that colleges and universi-ties "produce" education, using faculty members and students as inputs. According to this line of reasoning, education is then "consumed" by households. Construct a circular-flow diagram to represent the sector of the economy devoted to
1.8. The inhabitants of the fictional economy of Atlantis use money in the form of cowrie shells. Draw a circular-flow diagram showing households and firms. Firms produce potatoes and fish, and households buy potatoes and fish. Households also provide the land and labour to firms. Identify where in
1.7. You are in charge of allocating residents to your dormi-tory's baseball and basketball teams. You are down to the last four people, two of whom must be allocated to baseball and two to basketball. The accompanying table gives each person's batting average and free-throw average.Name Batting
1.6. Peter Pundit, an economics reporter, states that the European Union (EU) is increasing its productivity very rapidly in all industries. He claims that this productiv-ity advance is so rapid that output from the EU in these industries will soon exceed that of Canada and, as a result, Canada
1.5. According to the Canadian International Merchandise Trade Database from Statistics Canada, in December 2012, Canada sold aircraft and spacecraft worth $27.23 million to China and bought aircraft and spacecraft worth only $8.1 million from China. During the same month, however, Canada bought
1.4. In the ancient country of Roma, only two goods, spaghetti and meatballs, are produced. There are two tribes in Roma, the Tivoli and the Frivoli. By themselves, the Tivoli each month can produce either 30 kg of spaghetti and no meatballs, or 50 kg of meatballs and no spaghetti, or any
1.3. According to Statistics Canada, 11.0 million hectares of land in Canada were used for wheat or corn farming in 2012. Of those 11.0 million hectares, farmers used 9.6 million hectares to grow 999.62 million bushels of wheat and 1.4 million hectares of land to grow 514.15 million bushels of
1.2. Atlantis is a small, isolated island in the South Atlantic.The inhabitants grow potatoes and catch fish. The accompanying table shows the maximum annual out-put combinations of potatoes and fish that can be produced. Obviously, given their limited resources and available technology, as they
1.1. Two important industries on the island of Bermuda fish is 2000 hotel stays and that this opportunity cost is are fishing and tourism. According to data from the constant (the opportunity cost does not change).Food and Agriculture Organization of the Uniteda. If all 306 registered fishers were
1.1. Which of the following statements is a positive statement? Which is a normative statement?a. Society should take measures to prevent people from engaging in dangerous per-sonal behaviour.b. People who engage in dangerous personal behaviour impose higher costs on society through higher medical
1.3. Using the numbers from Table 2-1, explain why Canada and Brazil are willing to engage in a trade of 7 jets for 29 subway trains.
1.2. In Italy, an automobile can be produced by 8 workers in one day and a washing machine by 3 workers in one day. In Canada, an automobile can be produced by 6 workers in one day and a washing machine by 2 workers in one day.a. Which country has an absolute advantage in the production of
1.1. True or false? Explain your answer.a. An increase in the amount of resources available to Bombardier for use in producing CSeries jets and subway trains does not change its production possibility frontier.b. A technological change that allows Bombardier to build more subway trains for any
1.16. During the Great Depression, food was left to rot in the fields or fields that had once been actively cultivated were left fallow. Use one of the principles of economy-wide interaction to explain how this could have occurred.
1.15. In 2005, Hurricane Katrina caused massive destruction to the U.S. Gulf Coast. Tens of thousands of people lost their homes and possessions. Even those who weren't directly affected by the destruction were hurt because businesses failed or contracted and jobs dried up. Using one of the
1.14. In 2007, a sharp downturn in the U.S. housing mar-ket reduced the income of many who worked in the American home construction industry. In October of that year, a Conference Board of Canada report stated falling house prices in parts of the United States, com-bined with low savings and rising
1.13. On June 6, 2013, Stephen Poloz, the newly appointed governor of the Bank of Canada, addressed the House of Commons Standing Committee on Finance. In this speech he said, "In the immediate aftermath of the cri-sis (the Great Recession of 2008), stimulative monetary and fiscal policies proved
1.12. In each of the following situations, explain how govern-ment intervention could improve society's welfare by changing people's incentives. In what sense is the mar-ket going wrong?a. Pollution from auto emissions has reached unhealthy levels.b. Everyone in Woodville would be better off if
1.11. Governments often adopt certain policies in order to promote desired behaviour among their citizens. For each of the following policies, determine what the incentive is and what behaviour the government wishes to promote. In each case, why do you think that the government might wish to change
1.10. Discuss the efficiency and equity implications of each of the following policies. How would you go about balancing the concerns of equity and efficiency in these areas?a. The government pays the full tuition for every post-secondary student to study whatever subject he or she wishes.b. When
1.9. In each of the following cases, explain whether you think the situation is efficient or not. If it is not efficient, why not? What actions would make the situation efficient?a. Electricity is included in the rent at your dorm. Some residents in your dorm leave lights, computers, and appliances
1.8. Which of the following situations describes an equilib-rium? Which does not? If the situation does not describe an equilibrium, what would an equilibrium look like?a. Many people regularly commute from the suburbs to downtown Pleasantville. Due to traffic congestion, the trip takes 30 minutes
1.7. The Duguay family lives on the east side of Shediac Bay, and the Legault family lives on the west side. Each fam-ily's diet consists of lobster and potatoes, and each is self-sufficient, trapping their own lobsters and growing their own potatoes. Explain the conditions under which each of the
1.6. This morning you made the following individual choices: you bought a bagel and coffee at the local café, you drove to school in your car during rush hour, and you typed your roommate's term paper because you are a fast typist-in return for which she will do your laundry for a month. For each
1.5. In the following examples, state how you would use the principle of marginal analysis to make a decision.a. Deciding how many days to wait before doing your laundryb. Deciding how much library research to do before writing your term paperc. Deciding how many bags of chips to eatd. Deciding how
1.4. Use the concept of opportunity cost to explain the following.a. More people choose to get graduate degrees when the job market is poor.b. More people choose to do their own home repairs when the economy is slow and hourly wages are down.c. There are more parks in suburban than in urban
1.3. Liza needs to buy a textbook for the next economics class. The price at the university bookstore is $65. One online site offers it for $55 and another site, for $57. All prices include sales tax. The accompanying table indi-cates the typical shipping and handling charges for the textbook
1.2. Describe some of the opportunity costs when you decide to do the following.a. Attend college or university instead of taking a jobb. Watch a movie instead of studying for an examc. Ride the bus instead of driving your car
1.1. Your parents' after-tax income has increased because of a tax cut passed by Parliament. They therefore increase your allowance, which you spend on a spring break vacation.
1.1. In each of the following situations, identify which of the twelve principles is at work.a. You choose to shop at the local discount store rather than paying a higher price for the same merchan-dise at the local department store.b. On your spring break trip, your budget is limited to$35 a
1.1. Explain how each of the twelve principles of economics is illustrated in this story.1. Explain how each of the twelve principles of economics is illustrated in this story.
1.1. Explain how each of the following examples illustrates one of the three principles of economy-wide interactions.a. The prime minister urged Parliament to pass a package of temporary spending increases and tax cuts in early 2009, a time when employment was plunging and unemployment soaring.b.
1.. Which of the following describes an equilibrium situation? Which does not? Explain your answer,a. The restaurants across the street from the university dining hall serve better-tasting and cheaper meals than those served at the university dining hall. The vast majority of students continue to
1.1. Explain how each of the following situations illustrates one of the five principles of interaction.a. Using a university website, any student who wants to sell a used textbook for at least$30 is able to sell it to someone who is willing to pay $30.b. At a college tutoring co-op, students can
1.2. You make $45 000 per year at your current job with Whiz Kids Consultants. You are con-sidering a job offer from Brainiacs, Inc ., that will pay you $50 000 per year. Which of the following are elements of the opportunity cost of accepting the new job at Brainiacs, Inc .?a. The increased time
1.1. Explain how each of the following situations illustrates one of the four principles of indi-vidual choice.a. You are on your third trip to a restaurant's all-you-can-eat dessert buffet and are feeling very full. Although it would cost you no additional money, you forgo a slice of coconut cream
4. Eric and Kyle are fishers with different equipment and, as a result, different costs for catching fish. Eric’s costs for catching fish are $1000 per tonne for the first 5 tonnes and then $2500 per tonne for any additional tonnes. Kyle can harvest fish at a cost of $3000 for the first 15 tonnes
3. Suppose that Sea Shell Oil Company (SS) is pumping oil at a field off the coast of Nigeria. At this site, it has an extraction cost of $30 per barrel for the first 10 million barrels it pumps each year and then $60 per barrel for all subsequent barrels that it pumps each year, up to the site’s
2. A coal-fired power plant can produce electricity at a variable cost of 4 cents per kilowatt-hour when running at its full capacity of 30 megawatts per hour, 17 cents per kilowatt-hour when running at 20 megawatts per hour, and 24 cents per kilowatt-hour when running at 10 megawatts per hour. A
1. Suppose that the current (first) generation consists of 1 million people, half of whom are women. If the total fertility rate is 1.3 and the only way people die is of old age, how big will the fourth generation (the great-grandchildren) be? How much smaller (in percentage terms) is each
5. Ingvar and Olaf are the only two fishers in their area. Each has been assigned an ITQ that allows them to catch 20 tonnes of salmon. Ingvar’s MC of catching salmon is $6 per tonne while Olaf’s MC of catching salmon is $7 per tonne. If the price of salmon is $10 per tonne, then to maximize
4. Good methods for helping to protect natural resources include [LO19B.4]a. Establishing property rights and giving them to local usersb. Encouraging first-come, first-served property rightsc. Teaching people to consider user costd. Having the government set up and enforce ITQs
3. After mining 9273 tonnes of coal, Blue Sky Mining’s managers note that the marginal cost of mining the next tonne would be$40 per tonne. They also calculate that the user cost of mining that next tonne would be $35. If the market price of coal is$72, should Blue Sky mine an additional tonne?
2. It would cost the town of Irondale $50 million to build a gaspowered generator that could produce a maximum of 5 megawatts of electricity at 15 cents per hour. An alternative would be for Irondale to build a $100 million coal-fired generator that could produce a maximum of 15 megawatts of
1. The long-run downward trend in commodity prices is consistent with the idea that [LO19B.1]a. We are quickly running out of resourcesb. Resource demands have been increasing faster than resource suppliesc. Birthrates will soon increase due to the falling cost of livingd. Resource supplies have
11. Aquaculture is the growing of fish, shrimp, and other marine species in enclosed cages or ponds. The cages and ponds not only keep the creatures from swimming away but also provide aquaculturalists with strong property rights over their animals.Does this provide a good incentive for low-cost
10. Various cultures have come up with their own methods to limit catch size and prevent fishery collapse. In old Hawaii, certain fishing grounds near shore could be used only by certain individuals. And among lobster fishers in Maine, strict territorial rights are handed out so that only certain
9. Advanced Analysis User cost is equal to the present value of future profits in the model presented in Figure 19B-2. Will the optimal quantity to mine in the present year increase or decrease if the market rate of interest rises? Does your result make any intuitive sense? (Hint: If interest rates
8. Advanced Analysis Suppose a government wants to reduce its economy’s dependence on coal and decides as a result to tax coal-mining companies $1 per tonne for every tonne of coal they mine. Assuming that coal-mining companies treat this tax as an increase in extraction costs this year, what
7. If the current market price rises, does current extraction increase or decrease? What if the future market price rises?Do these changes in current extraction help to ensure the resource is extracted and used when it is most valuable?[LO19B.3]
6. Recall the model of non-renewable resource extraction presented in Figure 19B-2. Suppose a technological breakthrough means that extraction costs will fall in the future (but not in the present). What will this do to future profits and, therefore, to current user cost? Will current extraction
5. Suppose you hear two people arguing about energy. The first person says that we are running out of energy. The other counters that we are running out of cheap energy. Which person is correct, and why? [LO19B.2]
4. A community has a nighttime energy demand of 50 megawatts, but a peak daytime demand of 75 megawatts. It has the chance to build a 90-megawatt coal-fired plant that could easily supply all of its energy uses even at peak daytime demand.Should it proceed? Might there be lower-cost options?
3. Resource consumption per person in Canada is either flat or falling, depending on the resource. Yet living standards are rising due to improvements in technology that allow more output to be produced for every unit of input used in production.What does this say about the likelihood of our
2. Demographers have been very surprised that total fertility rates have fallen below 2.0, especially because most people in most countries tell pollsters that they would like to have at least two children. Can you think of any possible economic factors that may be causing women in many countries
1. Describe Thomas Malthus’s theory of human reproduction.Does it make sense for some species—say bacteria or rabbits? What do you think makes humans different? [LO19B.1]
LO19B.4 Relate how to use property rights help to prevent deforestation and species extinction.
LO19B.3 Show how the profit motive can encourage resource conservation.
LO19B.2 Describe why using a mix of energy sources is efficient, even if some of them are quite costly.
LO19B.1 Explain why the falling birth rate means that we are not likely to run out of natural resources.
4. Refer to Figure 3-6. Assume that the graph depicts the Canadian domestic market for corn. How many bushels of corn, if any, will Canada export or import at a world price of $1,$2, $3, $4, and $5? Use this information to construct the Canadian export supply curve and import demand curve for corn.
3. The following hypothetical production possibilities tables are for China and Canada. Assume that before specialization and trade the optimal product mix for China is alternative B and for Canada is alternative U. [LO19.1]
2. The following are hypothetical production possibilities tables for New Zealand and Spain. [LO19.1]
1. Assume that the comparative-cost ratios of two products—baby formula and tuna fish—are as follows in the nations of Canswicki and Tunata: [LO19.1]Canswicki: 1 can baby formula = 2 cans tuna fish Tunata: 1 can baby formula = 4 cans tuna fish In what product should each nation specialize?
13. Canadian apparel makers complain to Parliament about competition from China. Parliament decides to impose either a tariff or a quota on apparel imports from China. Which policy would Chinese apparel manufacturers prefer? [LO19.3]a. Tariffb. Quota
12. Draw a domestic supply-and-demand diagram for a product in which Canada does not have a comparative advantage. What impact do foreign imports have on domestic price and quantity? On your diagram show a protective tariff that eliminates approximately one-half of the assumed imports. What are the
11. Suppose that if Iceland and Japan were both closed economies, the domestic price of fish would be $100 per tonne in Iceland and $90 per tonne in Japan. If the two countries decided to open up to international trade with each other, which of the following could be the equilibrium international
10. Suppose that the current international price of wheat is $6 per bushel and that Canada is currently exporting 30 million bushels per year. If Canada suddenly became a closed economy with respect to wheat, would the domestic price of wheat in Canada end up higher or lower than $6? [LO19.2]a.
9. True or False? If a country is open to international trade, the domestic price can differ from the international price.[LO19.2]
8. Which of the following are benefits of international trade?Select one or more answers from the choices shown. [LO19.1]a. A more efficient allocation of resourcesb. A higher level of material well-beingc. Gains from specializationd. Promoting competitione. Deterring monopolyf. Reducing the threat
7. We see quite a bit of international trade in the real world. And trade is driven by specialization. So why don’t we see full specialization—for instance, all cars in the world being made in South Korea, or all the mobile phones in the world being made in China? Choose the best answer from
6. Suppose that the opportunity-cost ratio for watches and cheese is 1C : 1W in Switzerland but 1C : 4W in Japan. At which of the following international exchange ratios (terms of trade)will Switzerland and Japan be willing to specialize and engage in trade with each other? Select one or more
5. Suppose that the opportunity-cost ratio for fish and lumber is 1F : 1L in Canada but 2F : 1L in Iceland. Then _______ should specialize in producing fish while _______ should specialize in producing lumber. [LO19.1]a. Canada; Icelandb. Iceland; Canada
4. Suppose that the opportunity-cost ratio for pears and apples is 4P : 1A in British Columbia but 1P : 2A in Ontario. Which province has the comparative advantage in producing apples? [LO19.1]a. British Columbiab. Ontarioc. Neither
3. True or False? If Country B has an absolute advantage over Country A in producing bicycles, it will also have a comparative advantage over Country A in producing bicycles. [LO19.1]
2. In Country A, the production of 1 bicycle requires using resources that could otherwise be used to produce 11 lamps.In Country B, the production of 1 bicycle requires using resources that could otherwise be used to produce 15 lamps.Which country has a comparative advantage in making bicycles?
1. In Country A, a worker can make 5 bicycles per hour. In Country B, a worker can make 7 bicycles per hour. Which country has an absolute advantage in making bicycles? [LO19.1]a. Country Ab. Country B
9. How might protective tariffs reduce both the imports and the exports of the nation that levies tariffs? In what way do foreign firms that “dump” their products onto the Canadian market in effect provide bargains to Canadian consumers? How might the import competition lead to quality
8. In 2014, manufacturing workers in Canada earned an average wage of $23.19 per hour. That same year, manufacturing workers in Mexico earned an average wage of $6.36 per hour.(a) How can Canadian manufacturers possibly compete?(b) Why isn’t all manufacturing done in Mexico and other low-wage
7. Evaluate the effectiveness of artificial trade barriers, such as tariffs and import quotas, as a way to achieve and maintain full employment throughout the Canadian economy. How might such policies reduce unemployment in one Canadian industry but increase it in another Canadian industry? [LO19.3]
6. “The potentially valid arguments for tariff protection are also the most easily abused.” (a) What are these particular arguments? (b) Why are they susceptible to abuse? (c) Evaluate the use of artificial trade barriers, such as tariffs and import quotas, as a means of achieving and
5. Why is a quota more detrimental to an economy than a tariff that results in the same level of imports as the quota? What is the net outcome of either tariffs or quota for the world economy? [LO19.3]
4. What is an export demand curve? What is an import supply curve? How do such curves relate to the determination of the equilibrium world price of a tradable good? [LO19.2]
3. Suppose Big Country can produce 80 units of X by using all its resources to produce X and 60 units of Y by devoting all its resources to Y. Comparative figures for Small Nation are 60 of X and 60 of Y. Assuming constant costs, in which product should each nation specialize? Explain why. What are
2. Explain the following: “Canada can make certain toys with greater productive efficiency than can China. Yet we import those toys from China.” Relate your answer to the ideas of Adam Smith and David Ricardo. [LO19.1]
1. Distinguish among land-, labour-, and capital-intensive goods, citing an example of each without resorting to book examples.How do these distinctions relate to international trade? How do distinctive products, unrelated to resource intensity, relate to international trade? [LO19.1]

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Microeconomics 15th Canadian Edition Campbell R. Mcconnell, Stanley L. Brue, Sean M. Flynn, Thomas P. Barbiero - Solutions

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