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Economics Homework Seven - Model (view source)
Revision as of 03:14, November 1, 2009
, 03:14, November 1, 2009built through all online homework
2. Describe how you might use competition, perhaps even competing with yourself, to motivate you to achieve more.
2. Describe how you might use competition, perhaps even competing with yourself, to motivate you to achieve more.
:I would use competition with myself by setting a goal for myself. Having completed that goal, I would set a higher goal for myself and compete with my earlier achievements trying to get better and better. (Trisha)
:I believe that it is the will to win that motivates us. You cannot win without motivation so with competition people tend to do their best. (Aran)
:I believe that it is the will to win that motivates us. You cannot win without motivation so with competition people tend to do their best. (Aran)
3. We are going to have our midterm in two weeks. Think of a question that you would like to see answered or clarified at the next class.
3. We are going to have our midterm in two weeks. Think of a question that you would like to see answered or clarified at the next class.
:
:I would like to see long run and short run explained more clearly. (Isaac)
::Good question. The "long run" is a period long enough for a firm (company) to vary ALL all its inputs and costs and factors of production, including even its plant size, in order to achieve the lowest possible average costs. An example is how the New York Yankees can built an optimal new stadium in the long run. The "short run" is a time so short that the firm can vary its output only through a more or less intensive use of existing resources, without adjusting fixed costs like plant capacity. Adding temporary bleachers (at significant average cost for the fans who can sit in them) is an example. (Instructor)
:Can you please clarify in more simplistic terms what the Coase theorem is? (Allie)
::Great question. The Coase theorem means that the free market will cause the best use of resources, as long as transaction costs do not interfere. Imagine a beautiful soccer field, and lots of kids who want to play. The owner of the field wants it to be used, and making some money is better than making no money from it. The players want to play, and are willing to pay something. The free market will result in the owner and players negotiating a fee or conditions for using the field, and the field will be used in a productive way by people playing games ... as long as there is not too much "red tape" or middlemen or other problems impeding that result. If, for example, the owner cannot be reached because no one can find him, or if he requires a 100 pages of forms to be filled out, or if the city restricts playing soccer there, then the transaction costs prevent the best use of the soccer field. But as long as there is not interference by transaction costs, there will be an efficient use of the field no matter who owns it, because the owner and players will reach an agreement for its best use. (Instructor)
4. Do you think the converse of Gresham's Law is true with respect to speech and conversation, such that good speech or conversation (such as discussing the Bible) drives out bad? Explain.
4. Do you think the converse of Gresham's Law is true with respect to speech and conversation, such that good speech or conversation (such as discussing the Bible) drives out bad? Explain.
9. Suppose the underlying labor market is perfectly competitive, but there is a minimum wage above the market rate. Then suppose that the supply of labor increases. Explain what the result is and why.
9. Suppose the underlying labor market is perfectly competitive, but there is a minimum wage above the market rate. Then suppose that the supply of labor increases. Explain what the result is and why.
:
:The result is a shortage of jobs. The supply of people willing to work increases as wages increase, but at the same time, less employer are willing to pay quite so many employees as before at the higher wage. When using the free market, it is difficult to get the benefits of the free market if the supply and demand is being artificially adjusted. (Michelle)
10. What is the firm's profit or loss when Q=0 in the honors discussion above? (Answer simply in terms of another cost measure.) Is the firm profitable?
10. What is the firm's profit or loss when Q=0 in the honors discussion above? (Answer simply in terms of another cost measure.) Is the firm profitable?