Q: In the analysis of an exchange between two people, suppose both
In the analysis of an exchange between two people, suppose both people have identical preferences. Will the contract curve be a straight line? Explain. Can you think of a counter example?
See AnswerQ: Give an example of conditions when the production possibilities frontier might not
Give an example of conditions when the production possibilities frontier might not be concave.
See AnswerQ: A monopsonist buys labor for less than the competitive wage. What
A monopsonist buys labor for less than the competitive wage. What type of inefficiency will this use of monopsony power cause? How would your answer change if the monopsonist in the labor market were...
See AnswerQ: The Acme Corporation produces x and y units of goods Alpha and
The Acme Corporation produces x and y units of goods Alpha and Beta, respectively. a. Use a production possibility frontier to explain how the willingness to produce more or less Alpha depends on the...
See AnswerQ: In the context of our analysis of the Edgeworth production box,
In the context of our analysis of the Edgeworth production box, suppose that a new invention changes a constant-returns-to-scale food production process into one that exhibits sharply increasing retur...
See AnswerQ: Some years ago, an article appeared in the New York Times
Some years ago, an article appeared in the New York Times about IBM’s pricing policy. The previous day, IBM had announced major price cuts on most of its small and medium sized computers. The article...
See AnswerQ: Suppose that country A and country B both produce wine and cheese
Suppose that country A and country B both produce wine and cheese. Country A has 800 units of available labor, while country B has 600 units. Prior to trade, country A consumes 40 pounds of cheese and...
See AnswerQ: Suppose gold (G) and silver (S) are substitutes
Suppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also that the supplies of both are fixed in the short run (QG = 75 and QS = 300)...
See AnswerQ: Using general equilibrium analysis, and taking into account feedback effects,
Using general equilibrium analysis, and taking into account feedback effects, analyze the following: a. The likely effects of outbreaks of disease on chicken farms on the markets for chicken and pork...
See AnswerQ: Jane has 3 liters of soft drinks and 9 sandwiches. Bob
Jane has 3 liters of soft drinks and 9 sandwiches. Bob, on the other hand, has 8 liters of soft drinks and 4 sandwiches. With these endowments, Jane’s marginal rate of substitution (MRS) of soft drink...
See Answer
