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| | ==Assignment== | | ==Assignment== |
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| − | Answer 5 out of 6 questions below: | + | Answer 6 out of 7 questions below: |
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| | 1. In your own words, try to give a better definition of "externalities" than provided by this Lecture. | | 1. In your own words, try to give a better definition of "externalities" than provided by this Lecture. |
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| − | 2. Question about total and marginal revenue. | + | 2. Explain why marginal revenue must be zero when total revenue is maximized. |
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| − | 3. Question about shortage due to price ceiling. | + | 3. Revisit the problem on the midterm about the price ceiling, which asked how much the shortage would be. Provide the correct answer and explain why. |
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| | 4. Give an example of a positive externality, and an example of a negative externality. The example does not have to be limited to a business. | | 4. Give an example of a positive externality, and an example of a negative externality. The example does not have to be limited to a business. |
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| | 6. Review question: the cross-elasticity of A with respect to B is positive, and C with respect to D is negative. What is the relationship (complement or substitute?) of goods A and B with each other, and C and D with each other? Explain. | | 6. Review question: the cross-elasticity of A with respect to B is positive, and C with respect to D is negative. What is the relationship (complement or substitute?) of goods A and B with each other, and C and D with each other? Explain. |
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| | + | 7. List the four factors of production and give a very brief explanation of each. |
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| | ===Honors=== | | ===Honors=== |
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| | 7. Mathematically prove (or disprove!) the answer to the question on the midterm exam about P=30/Q. | | 7. Mathematically prove (or disprove!) the answer to the question on the midterm exam about P=30/Q. |
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| − | 8. Derived demand | + | 8. Provide the best explanation of "public good" that you can. |
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| − | 9. | + | 9. Find a question on the midterm that describes an unusual situation in the real world, and explain why the scenario of the question is unrealistic. |
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| − | 10. | + | 10. |
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| | == References == | | == References == |