Economics Homework Twelve - Model - Revision history

AddisonDM at 01:23, March 9, 2011

2011-03-09T01:23:37Z

AddisonDM at 03:34, March 5, 2011

2011-03-05T03:34:35Z

Aschlafly: Protected "Economics Homework Twelve - Model": model answers are complete ([edit=sysop] (indefinite) [move=sysop] (indefinite))

2009-12-17T02:24:47Z

Protected "Economics Homework Twelve - Model": model answers are complete ([edit=sysop] (indefinite) [move=sysop] (indefinite))

Aschlafly: tightened up

2009-12-16T23:41:49Z

tightened up

Aschlafly: refined answer to 3

2009-12-15T03:39:39Z

refined answer to 3

Aschlafly: improved third answer

2009-12-15T03:33:10Z

improved third answer

Aschlafly: completing model answers from online homework

2009-12-14T03:50:39Z

completing model answers from online homework

Aschlafly: a start

2009-12-14T02:21:20Z

a start

Aschlafly: setting up template

2009-12-12T22:37:49Z

setting up template

New page

1. A monopoly is one seller without any competitors. What is a "monopsony"?

2. Define, in your own words, what a "production possibilities curve" is.

3. Review: how is the elasticity of demand for labor related to the price elasticity of demand for the product of that labor?

4. Do you think that government policy should give high priority to the Lorenz curve? Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.

5. Look again at Figure A. What is the opportunity cost of shifting production from B to C?

6. Review: explain again what AFC, AVC and ATC are, and how they relate to each other. When should a firm shut down in the short run?

7. What is needed to reach point D in Figure A? (In other words, what causes a production possibilities curve to shift outward?)

8. Look again at Figure C in the lecture (the first graph in this Lecture). At what point is total revenue maximized?

9. Explain why the production possibilities curve is convex (opening downward like the top of a circle) rather than concave (opening upward like the inside of a bowl) or a straight line.

10. Suppose you are a monopsony, and you must pay $9 per hour ($9/hr) to hire nine workers, but in order to hire one more worker you must pay $10/hr. The tenth worker will bring in $15 extra per hour to the firm’s revenue. Do you hire the tenth worker?

11. In the term "comparative advantage," to what does the adjective "comparative" refer? What is the term actually "comparing"? Explain.

@@ Line 1: / Line 1: @@
-.  A monopoly is one seller without any competitors.  What is a "monopsony"?
+.  A [[monopoly]] is one seller without any competitors.  What is a "monopsony"?
-:A monopsony is only one buyer. (Allie)
+:A [[monopsony]] is only one buyer. (Allie)
 :A monopsony is when a buyer has control over all of the purchases. (Isaac)

← Older revision		Revision as of 03:34, March 5, 2011
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	:It is really a "comparison of the comparisons." What really matters is how much more efficiently a nation can produce one good relative to another good, compared with how much more efficiently the other nation can produce one good relative to another good. But don't get too tangled up in this detail for purposes of the exam. Any comparison of nations and their production of two goods on the exam is likely a question about comparative advantage, and the correct answer will almost certainly be for the cheaper country to produce what it produces best. (Instructor)		:It is really a "comparison of the comparisons." What really matters is how much more efficiently a nation can produce one good relative to another good, compared with how much more efficiently the other nation can produce one good relative to another good. But don't get too tangled up in this detail for purposes of the exam. Any comparison of nations and their production of two goods on the exam is likely a question about comparative advantage, and the correct answer will almost certainly be for the cheaper country to produce what it produces best. (Instructor)
		+
		+	[[Category:Economics lectures]]

← Older revision		Revision as of 23:41, December 16, 2009
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	:At first I thought had something to do with comparing the efficiencies of the two nations, but really Comparative Advantage compares the efficiency of production between the two products within a nation. That is, compare the two efficiencies of production and choose the more efficiently produced good as your main product. (Addison)		:At first I thought had something to do with comparing the efficiencies of the two nations, but really Comparative Advantage compares the efficiency of production between the two products within a nation. That is, compare the two efficiencies of production and choose the more efficiently produced good as your main product. (Addison)

−	:It is really a "comparison of the comparisons." ~~In other words, what~~ really matters is how much more efficiently a nation can produce one good relative to another, compared with how much more efficiently the other nation can produce one good relative to another. But don't get too tangled up in this detail. ~~For our purposes any~~ comparison of nations and their production of two goods is likely a question about comparative advantage, and the correct answer is for the cheaper country to produce what it produces best. (Instructor)	+	:It is really a "comparison of the comparisons." What really matters is how much more efficiently a nation can produce one good relative to another good, compared with how much more efficiently the other nation can produce one good relative to another good. But don't get too tangled up in this detail for purposes of the exam. Any comparison of nations and their production of two goods on the exam is likely a question about comparative advantage, and the correct answer will almost certainly be for the cheaper country to produce what it produces best. (Instructor)

@@ Line 15: / Line 15: @@
 :If the item is elastic so will be the demand for labor. (Aran)
-:This is a tricky question, and it helps to consider the extreme case to get the right answer.  If the good produced by the firm is ''highly'' price elastic, then a small increase in price causes a large decrease in output.  A big decrease in output means there is a big decrease in need for workers to produce that output.  So the demand for labor is highly elastic also.  (Instructor)
+:This is a tricky question, and it helps to consider the extreme case to get the right answer.  If the good produced by the firm is ''highly'' price elastic, then a small increase in price causes a large decrease in demand for the good, and thus a large decrease in output by the firm.  But this large decrease in output means there must be a large decrease in the number of workers needed to produce that output.  Thus the demand for labor is highly elastic also.  (Instructor)
 .  Do you think that government policy should give high priority to the Lorenz curve?  Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.

← Older revision		Revision as of 03:33, December 15, 2009
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	:If the item is elastic so will be the demand for labor. (Aran)		:If the item is elastic so will be the demand for labor. (Aran)
		+
		+	:This is a tricky question, and it helps to consider the extreme case to get the right answer. If the good produced by the firm is ''highly'' price elastic, then a small increase in price causes a large decrease in output. A big decrease in output means there is a big decrease in need for workers to produce that output. So the demand for labor is highly elastic also. (Instructor)

	4. Do you think that government policy should give high priority to the Lorenz curve? Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.		4. Do you think that government policy should give high priority to the Lorenz curve? Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.

← Older revision	Revision as of 02:24, December 17, 2009
(No difference)

@@ Line 1: / Line 1: @@
 .  A monopoly is one seller without any competitors.  What is a "monopsony"?
 .  Define, in your own words, what a "production possibilities curve" is.
 .  Review: how is the elasticity of demand for labor related to the price elasticity of demand for the product of that labor?
-:Here's an example curve:
+:If the item is elastic so will be the demand for labor. (Aran)
 .  Do you think that government policy should give high priority to the Lorenz curve?  Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.
 . Look again at Figure A.  What is the opportunity cost of shifting production from B to C?
 . Review:  explain again what AFC, AVC and ATC are, and how they relate to each other.  When should a firm shut down in the short run?
 . What is needed to reach point D in Figure A?  (In other words, what causes a production possibilities curve to shift outward?)
 .  Look again at Figure C in the lecture (the first graph in this Lecture).  At what point is total revenue maximized?
 .  Explain why the production possibilities curve is convex (opening downward like the top of a circle) rather than concave (opening upward like the inside of a bowl) or a straight line.
 .  Suppose you are a monopsony, and you must pay $9 per hour ($9/hr) to hire nine workers, but in order to hire one more worker you must pay $10/hr.  The tenth worker will bring in $15 extra per hour to the firm’s revenue.  Do you hire the tenth worker?
 .  In the term "comparative advantage," to what does the adjective "comparative" refer?  What is the term actually "comparing"?  Explain.

← Older revision		Revision as of 02:21, December 14, 2009
Line 4:		Line 4:

	3. Review: how is the elasticity of demand for labor related to the price elasticity of demand for the product of that labor?		3. Review: how is the elasticity of demand for labor related to the price elasticity of demand for the product of that labor?
		+
		+	:Here's an example curve:
		+	:http://ingrimayne.com/econ/AllocatingRationing/MeasuringIncomeDist.html (Note the shape of the actual income distribution is different from the erroneous step function I described in Lecture 12. Sorry!)

	4. Do you think that government policy should give high priority to the Lorenz curve? Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.		4. Do you think that government policy should give high priority to the Lorenz curve? Explain the issue that a Lorenz curve addresses, and whether you think that should be a high priority of government economic policy.