View source for Economics Lecture Twelve

===Honors===

Answer question 9, and then 2 out of the following 4 questions:

9.  Explain why in long-run equilibrium the price charged in monopolistic competition is greater than marginal cost but equal to average total cost.

10.  Economics is sometimes called the “dismal science” because economists predicted population to grow faster than the food supply, marginal returns to diminish, and profits to vanish.  But, in fact, there is an abundance of food and profits have not vanished.  Why is economics not so dismal after all?

11.  What is "Keynesian economics" and what is your view of it?

12.  An agreement by different firms with each other to reduce output is illegal.  Why should that be illegal?

13.  Nash equilibrium, revisited:  What is the Nash equilibrium for two gas stations (an oligopoly) that are situated immediately across the street from each other?  In other words, what price do they sell at, expressed in terms of one of their cost measures?  Explain the process that reaches that "equilibrium".
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[[Category:Economics lectures]]
{{DEFAULTSORT: Economics Lecture 12}}