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Economics Homework Twelve - Model (view source)
Revision as of 01:23, March 9, 2011
, 01:23, March 9, 2011no edit summary
1. A monopoly is one seller without any competitors. What is a "monopsony"?
1. 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)
:A monopsony is when a buyer has control over all of the purchases. (Isaac)
: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 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)
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.
: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)
[[Category:Economics lectures]]