QUESTION You are the manager of a small U.S. firm that sells nails in a competitive U.S. market (the nails you sell are a standardized commodity; stores view your nails as identical to those available from hundreds of other firms). You are concerned about two events you recently learned about through trade publications: (a) the overall market supply of nails will decrease by 2 percent, […]

QUESTION In May and June, Mary spent all her clothing budget on bathing suits and beach bags. Each bathing suit cost $73. At Mary’s optimal choice, her marginal utility from the last bathing suit purchased is 337 and her marginal utility from the last beach bag purchased is 232. This means that each handbag must cost: Please calculate the answer to two decimals. ANSWER Calculating […]

QUESTION Todd is a cattle rancher. In June and July he spent his clothing budget on jeans and cowboy hats. Each pair of jeans cost $55 and each hat cost $40. At Todd’s optimal choice, his marginal utility from the last pair of jeans purchased is 600. This means that his marginal utility from the last cowboy hat purchased is: You can round the final […]

QUESTION Find an advertisement for a product (and be sure to include it) that’s trying to change its elasticity. Recall it needs to do at least one of the following: Try to make consumers believe that substitution isn’t an option. Try to make their product more of a necessity vs. a luxury. Try to make time an issue such that you have to buy their […]

QUESTION What are the characteristics of price-taker markets? What do each of these characteristics mean for a market? What is the decision rule for firms to maximize profits? What happens to total revenue for a good with an elastic demand if the price increases? Why? What do economists consider for profit that accountants don’t? Give two examples that would fit in this difference. Graph the […]

QUESTION Consider a competitive oil market where a producer faces costs of $10 dollars per barrel to extract oil from the ground. Let 𝑝𝑡 denote the price of oil in period 𝑡 and let r be the interest rate. a) Suppose a firm extracts a barrel of oil in period 𝑡, write an expression for the firm’s profit per barrel. b) Assume that asset markets […]

QUESTION How would you reply? When I had taken my Public Speaking class, the professor stated that a sufficient way to use PowerPoint was to make sure we didn’t overwhelm with to much dialogue. Instead to make sure all main points are presented with supporting points. If our presentation required imagery or art then don’t overwhelm it with it. Also, having note cards in assisting […]

QUESTION The recent monetary policy response in the US to a positive shock Consider the recent monetary policy response in the world’s largest economy, the United States. It has become evident that the Federal Reserve is serious about reducing the annual rate of inflation which one year ago was 8.2% in September of 2022. Raising the US cash rate quite sharply can be an effective […]

QUESTION In New York, the price of health care services is higher than it is in Oregon. Nevertheless, consumers buy more health care services in New York than in Oregon. This suggests that the simply supply and demand model does not apply to markets of things like health care. (In your answer, please provide a diagram) ANSWER Understanding the Complexities of Healthcare Economics: A New […]

QUESTION We are examining the market for leather jackets in Ontario. Given below are the demand schedule and supply schedule for this product for one year. Accurately graph the demand and supply curves on one graph and determine equilibrium in this market. Label the graph and axises properly. State where equilibrium is (both price and quantity), don’t just point to it on the graph. Make […]