Lecture 1: Introduction to Microeconomics Instructor: Jon Gruber, 14.01 students View the complete course: http://ocw.mit.edu/14-01SCF10 License: Creative Commons BY-NC-SA More information at http://ocw.mit.edu/terms More courses at http://ocw.mit.edu
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 4.The market forces of Supply and Demand. Gregory Mankiw. Principles of Economics Competitive Markets. Perfectly competitive markets. Ceteris Paribus
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BooK : http://book.naver.com/bookdb/book_detail.nhn?bid=13016672 Provider : http://www.elkedu.co.kr Blog: http://blog.naver.com/elkedu_com This video is a part of Mankiw's Economic Lecture in Cartoon (Ten Principles of Economics) that will be published in November. If you like this video, please click YouTube Like Button and give a comment. This lecture was produced by ELK (e-learning Korea). http://www.elkedu.com
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Exercises 1-5Chapter 7. Consumers, producers, and the efficiency of Markets. Gregory Mankiw. Principles of Economics 1. An early freeze in California sours the lemon crop. What happens to consumer surplus in the market for lemonade? Illustrate your answers with diagrams. 2. Suppose the demand for French bread rises. What happens to producer surplus in the market for French bread? What happens to producer surplus in the market for flour? Illustrate your answer with diagrams. 3. It is a hot day, and Bert is very thirsty. Here is the value he places on a bottle of water:a. From this information, derive Bert’s demand schedule. Graph his demand curve for bottled water. b. If the price of bottle of water is $4, how many bottles does Bert Buy? How much consumer surplus does Bert get from his purchases? Show Bert’s consumer surplus in your graph. c. If the price falls to $2, how does quantity demanded change? How does Bert’s consumer surplus change? Show these changes in your graph. 4. Ernie owns a water pump. Because pumping large amounts of water is harder than pumping small amounts, the cost of producing a bottle of water rises as he pumps more. Here is the cost he incurs to produce each bottle of water:a. From this information, derive Ernie’s supply schedule. Graph his supply curve for bottle of water. b. If the price of a bottle of water is $4, how many bottles does Ernie produce and sell? How much producer surplus does Ernie get from these sales? Show Ernie’s producer surplus in your graph? c. If the price rises to $6, how does quantity supplied change? How does Ernie’s producer surplus change? Show these changes in your graph. 5. Consider a market in which Bert from problem 3 is the buyer and Ernie from problem 4 is the seller. A. Use Ernie’s supply schedule and Bert’s demand schedule to find the quantity supplied and quantity demanded at prices of $2, $4, and $6. Which of these prices brings supply and demand into equilibrium? b. What are consumer surplus, producer surplus, and total surplus in this equilibrium? c. If Ernie produced and Bert consumed one less bottle of water, what would happen to total surplus? d. If Ernie produced and Bert consumed one additional bottle of water, what would happen to total surplus.
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Welfare economics. Consumer Surplus. Willingness to pay. Using the demand curve to measure consumer surplus. How a lower price raises consumer surplus. Producer surplus. Cost and the willingness to sell. Using the supply curve to measure producer surplus. How a higher price raises producer surplus. Market efficiency. The benevolent Social Planner.
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Chapter 10. Externalities. Principles of Economics. Gregory Mankiw. Examples of externalities. Welfare economics: A recap. Negative externalities in production. Pollution and the Social Optimum. Positive Externalities in Production. Technology Spillovers and the Social Optimum. Externalities in consumption Private Solutions to Externalities-The types of private solutions. The Coase theorem Why private solutions do not always work. Public policies toward externalities-Regulation. Pigovian taxes and subsidies. Tradable Pollution Permits The equivalence of Pigovian Taxes and Pollution Permits Objections to the economics analysis od pollution
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation It is a summary of the Chapter 2 of the book Principle of Economics of Gregory Mankiw. First Model. The circular-flow Diagram Second Model: The production possibilities frontier. Positive Vs Normative analysis
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Chapter 13. The Costs of Production. Gregory Mankiw. Principles of Economics. 7th edition What Are Costs? -Costs as Opportunity Costs -The cost of capital as an Opportunity Cost -Economic Profit versus Accounting Profit Production and Costs – The Production Function – From the Production Function to the Total-Cost Curve -Fixed and Variable Costs The Various Measures of Cost-Average -Average and Marginal Cost. -Cost curves and their shapes -Typical Cost Curves Costs in the Short Run and in the Long Run-The Relationship between Short-Run and Long-Run Average Total Cost
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Summary of Principle of Economics. Gregory Mankiw. 1. People face tradeoffs. 2. The cost of something is what you give up to get it. 3. Rational people think at the margin. 4. People respond to incentives. 5. Trade can make everycone better off. 6. Markets are usually a good way to organize economic activity 7. Governments can sometimes improve market outcomes. 8. A country’s standard of living depends on its ability to produce goods and services. 9. Prices rise when the government prints too much money. 10. Society faces a short-run trade off between inflation and unemployment
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Contact us to acquire the Test Bank and/or Solution Manual; Email: atfalo2(at)yahoo(dot)com Skype: atfalo2
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Chapter 14. Firms in Competitive Markets. Gregory Mankiw. Principles of Economics. 7th edition What is a Competitive Market?-The meaning of competition What is a Competitive Market?-The Revenue of a competitive firm Profit Maximization and the CompetitiveFirm’s Supply Curve - A Simple Example of Profit Maximization Profit Maximization and the CompetitiveFirm’s Supply Curve- The Marginal-Cost Curve and the Firm’s Supply Decision Profit Maximization and the CompetitiveFirm’s Supply Curve- The Marginal-Cost Curve and the Firm’s Supply Decision Profit Maximization and the CompetitiveFirm’s Supply Curve- The Firm’s Short-Run Decision to Shut Down Profit Maximization and the CompetitiveFirm’s Supply Curve- The Firm’s Short-Run Decision to Shut Down Profit Maximization and the CompetitiveFirm’s Supply Curve- Spilt Milk and Other Sunk Costs Profit Maximization and the CompetitiveFirm’s Supply Curve- The Firm’s Long-Run Decision to Exit or Enter a Market Profit Maximization and the CompetitiveFirm’s Supply Curve- Measuring Profit in Our Graph for the Competitive Firm The Supply Curve in a Competitive Market The Supply Curve in a Competitive Market-The Short Run: Market Supply with a Fixed Number of Firms The Supply Curve in a Competitive Market-The Long Run: Market Supply with Entry and Exit The Supply Curve in a Competitive Market-Why Do Competitive Firms Stay in Business If They Make Zero Profit? The Supply Curve in a Competitive Market-A Shift in Demand in the Short Run and Long Run The Supply Curve in a Competitive Market-A Shift in Demand in the Short Run and Long Run The Supply Curve in a Competitive Market-Why the Long-Run Supply Curve Might Slope Upward
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Solution to the first eight exercicses of 10 principles of economics. 1. Describe some of the tradeoffs faced by the following: a. A family deciding a whether to buy a car. b. A member of Congress deciding how much to spent on national parks. c. A company president deciding whether to open a new factory. d. A professor deciding how much to prepare for class 2. 2. You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, forgone, wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs? 3. You were planning to spend Saturday working at your part-time job, but a friend asks you to go skiing. What is the true cost of going skiing? Now suppose that you had been planning to spend the day studying at the library. What is the cost of going skiing in this case? Explain 4. You win $100 in a basketball pool. You have a choice between spending the money now or putting it away for a year in a bank account that pays 5% interest. What is the opportunity cost of spending the $100 now? 5. The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a recent meeting, your salespeople report that the introduction of competing products has reduced the expected sales of your new product to $3 million. If it would cost $1 million to finish development and make the product, should you go ahead and do so? What is the most that you should pay to complete development? 6. Three managers of the Magic Potion Company are discussing a possible increase in production. Each suggests a way to make this decision. Harry: We should examine whether our company’s productivity-gallons of potion per worker-would rise or fall. Ron: We should examine whether our average cost- cost per worker-would rise or fall. Hermione: We should examine whether the extra revenue from selling the additional potion would be greater or smaller than the extra costs. Who do you think is right ? Why? 7. The Social Security system provides income for people over 65.If a recipient of Social Security decides to work and earn some income, the amount he or she receives in Social Security benefits is typically reduced.a. How does the provision of Social Security affect people’s incentive to save while working? 8. A recent bill reforming the government’s antipoverty programs limited many welfare recipients to only two year benefits.A. How does this change affect the incentive for working? b. How might this change represent a tradeoff between equity and efficiency?
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Facebook.com/ideahometutors Ten principles of Economics ch1 mankiw principles of Economics notes Ba (h) delhi University notes Delhi University general elective Economics notes Mankiw macroeconomics notes Ma Economics du entrance notes ba hons Economics, ma hons Economics, du ma entrance, ten principles of Economics, mankiw principles of Economics, mankiw pdf, introductry Economics,idea tutors,du Economics notes,Economics notes
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 5. Elasticity and Its application. Gregory Mankiw. Principles of Economics. The price elasticity of demand and its determinants. Computing the price elasticity of demand. The midpoint method: A better way to calculate percentage changes and elasticities. The midpoint method: A better way to calculate percentage changes and elasticities Different cases of Price Elasticity demand Different cases of Price Elasticity Demand. Total revenue and the price elasticity. Total revenue and the price elasticity. Total revenue and the price elasticity of demand. Other Demand Elasticities.The income Elasticities. Cross-Price Elasticity of Demand Elasticity of supply. Computing the price elasticity of supply. The variety of supply curves.
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Economics, price ceiling, price floor, tax, Mankiw
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In the 7th edition of Greg Mankiw's Principles text he introduces students to the chapter they are about to study. This added context is just one feature of the best selling text and most advanced digital learning environment in all of undergraduate economics. For more information, please visit our website at http://bit.ly/1gnKXeh
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 13. The Costs of Production. Gregory Mankiw. Principles of Economics. 1-5 exercises. 7th edition 1. This chapter discusses many types of costs: opportunity cost, total cost, fixed cost, variable cost, average total cost, and marginal cost. Fill in the type of costthat best completes each sentence: a. What you give up for taking some action is called the ______. b. _____ is falling when marginal cost is below it and rising when marginal cost is above it. c. A cost that does not depend on the quantity produced is a(n) ______. d. In the ice-cream industry in the short run, ______ includes the cost of cream and sugar but not the cost of the factory e. Profits equal total revenue minus ______. f. The cost of producing an extra unit of output is the ______. 2. Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per year to rent the location and buy the stock. In addition, she would have to quit her $50,000 per year job as an accountant. A. Define opportunity cost. b. What is your aunt’s opportunity cost of running a hardware store for a year? If your aunt thinks she can sell $510,000 worth of merchandise in a year, should she open the store? Explain.. 3. A commercial fisherman notices the followingrelationship between hours spent fishing and the quantity of fish caught: a. What is the marginal product of each hour spent fishing? b. Use these data to graph the fisherman’s production function. Explain its shape c. The fisherman has a fixed cost of $10 (his pole). The opportunity cost of his time is $5 per hour. Graph the fisherman’s total-cost curve. Explain its shape. 4. Nimbus, Inc., makes brooms and then sells them door to-door. Here is the relationship between the number of workers and Nimbus’s output in a given day: a. Fill in the column of marginal products. What pattern do you see? How might you explain it? b. A worker costs $100 a day, and the firm has fixed costs of $200. Use this information to fill in the Column for total cost. c. Fill in the column for average total cost. (Recall that ATC=TC/Q.) What pattern do you see? d. Now fill in the column for marginal cost. (Recall that MC=ΔTC/ΔQ.) What pattern do you see? e. Compare the column for marginal product and the column for marginal cost. Explain the relationship. f. Compare the column for average total cost and the column for marginal cost. Explain the relationship. 5. You are the chief financial officer for a firm that sells digital music players. Your firm has the following average-total-cost schedule: A. Your current level of production is 600 devices, all of which have been sold. Someone calls, desperate to buy one of your music players. The caller offers you $550 for it. Should you accept the offer? Why or why not?.
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 14. Principles of Economics. Firms in Competitive Markets. Exercises 1- 6. Gregory Mankiw. 1. Many small boats are made of fiberglass, which is derived from crude oil. Suppose that the price of oil rises.a. Using diagrams, show what happens to the costcurves of an individual boat-making firm and tothe market supply curve. b. What happens to the profits of boat makers in theshort run? What happens to the number of boatmakers in the long run? 2. You go out to the best restaurant in town and order a lobster dinner for $40. After eating half of the lobster, you realize that you are quite full. Your date wants you to finish your dinner because you can’t take it home and because “you’ve already paid for it.” Whatshould you do? Relate your answer to the material inthis chapter. 3. Bob’s lawn-mowing service is a profit-maximizing,competitive firm. Bob mows lawns for $27 each. Histotal cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say aboutBob’s short-run decision regarding shutdown and hislong-run decision regarding exit? 4. Consider total cost and total revenue given in the followingtable: a. Calculate profit for each quantity. How much should the firm produce to maximize profit? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2½.) At what quantity do these curves cross? How does this relate to your answer to part (a)? b. Calculate marginal revenue and marginal cost for each quantity. Graph them. (Hint: Put the points between whole numbers. For example, the marginal cost between 2 and 3 should be graphed at 2½.) At what quantity do these curves cross? How does this relate to your answer to part (a)? c. Can you tell whether this firm is in a competitive industry? If so, can you tell whether the industry is in a long-run equilibrium? 5. Ball Bearings, Inc. faces costs of production as follows: a. Calculate the company’s average fixed costs, average variable costs, average total costs, and marginal costs at each level of production. b. The price of a case of ball bearings is $50. Seeing that he can’t make a profit, the chief executive officer (CEO) decides to shut down operations. What is the firm’s profit/loss? Was this a wise decision? Explain. c. Vaguely remembering his introductory economics course, the chief financial officer tells the CEO it is better to produce 1 case of ball bearings, because marginal revenue equals marginal cost at that quantity. What is the firm’s profit/loss at that level of production? Was this the best decision? Explain. 6. Suppose the book-printing industry is competitive and begins in a long-run equilibrium.a. Draw a diagram showing the average total cost,marginal cost, marginal revenue, and supply curveof the typical firm in the industry. b. Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing books. What happens to Hi-Tech’s profits and the price of books in the short run when Hi-Tech’s patent prevents other firms from using the new technology? c. What happens in the long run when the patent expires and other firms are free to use the technology?
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 17. Oligopoly. Principles of Economics. Gregory Mankiw. 7th Edition. Oligopoly-Introduction Markets with only a Few Sellers Markets with only a Few Sellers – A Duopoly Example Markets with only a Few Sellers – Competition, Monopolies and Cartels Markets with only a Few Sellers – The equilibrium for an Oligopoly Markets with only a Few Sellers – How the size of an Oligopoly Affects the Market Outcome The Economics of Cooperation The Economics of Cooperation – The Prisoner’s The Economics of Cooperation – the Prisoners’ Dilemma and the welfare of society The Economics of Cooperation – why People sometimes Cooperate Public policy toward Oligopolies Public policy toward Oligopolies - Controversies over Antitrust Policy Conclusion
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Exercise 1-7.Chapter 5.Elasticity and its application. Gregory Mankiw. Principles of Economics . 1. For each of the following pairs of goods, which good would you expect to have more elastic demand and why? A. Required textbooks or mystery novels. B. Beethoven recordings or classical music recordings in general. C. Heating oil during the next six months or heating oil during the next five years. D. Root beer or water. 2. Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston A. As the price of tickets rises from $200 to $250, what is the price elasticity of demand for (i) business travelers and (ii) vacationers? (Use the midpoint method in your calculations.) B. Why might vacationers have different elasticity than business travelers? 3. Suppose that your demand schedule for compact discs is as follows: Use the midpoint method to calculate your price elasticity of demand as the price of compact discs increases from $8 to $10 if (i) your income is $10,000, and (ii) your income is $12,000. b. Calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $12, and (ii) the price is $16. 4. Emily has decided always to spend one-third of her income on clothing. A. What is her income elasticity of clothing demand? b. What is her price elasticity of clothing demand? 5. The New York Times reported (Feb.17, 199, p.25) that subway ridership declined after a fare increase: “There were nearly four million fewer riders in December 1995, the first full month after the price of a token increased 25 cents to $1.50, than in previous December, a 4.3 percent decline.”a. Use these data to estimate the price elasticity of demand for subway riders. a. Use these data to estimate the price elasticity of demand for subway riders. b. According to your estimate, what happens to the Transit Authority’s revenue when the fare rises? 6. Two drivers- Tom and Jerry-each drive up to a gas station. Before looking at the price, each places an order. Tom says, “I’d like 10 gallons of gas.” Jerry says, “I’d like $10 worth of gas.” What is each driver’s price elasticity of demand? 7. Economists have observed that spending on restaurant meals declines more during economic downturns than does spending on food to be eaten at home. How might the concept of elasticity help to explain phenomenon?
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 6. Supply, Demand, and Government Policies. Gregory Mankiw. Principles of Economics . Price ceiling. Price Floor. How Taxes on Buyers Affect Market Outcomes. How Taxes on Sellers Affect Market Outcomes. Elasticity and Tax Incidence
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 19. Earnings and Discrimination. Gregory Mankiw. Principles of Economics. 7th edition. Introduction Some Determinants of Equilibrium Wages In the news: Higher education as an investment. Ability, Effort, and Chance. Case Study – The benefits of beauty An Alternative View of Education: Signaling The Superstar Phenomenon 19-If Above-Equilibrium Wages: Minimum-Wage Laws, Unions, and Efficiency Wages The Economics of Discrimination. Case Study – Is Emily More Employable than Lakisha? Discrimination by Employers Case Study – Segregated Streetcars and the Profit Motive Discrimination by Customers and Governments Discrimination in Sports In the news: Gender differences. Conclusion
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Solution Exercises 2- 7. Chapter 2. Thinking like an economist. Gregory Mankiw. Principles of economics. 2. One common assumption in economics is that the products of different firms in the same industry are indistinguishable. For each of the following industries, discuss whether this is a reasonable assumption. A.steel B. Novels C. Wheat. D. Fast food. 3. Draw a Circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of dollars for each of the following activities.A. Sam pays a storekeeper $1 for a quart of milk. A. Sam pays a storekeeper $1 for a quart of milk. B. Sally earns $4.50 per hour working at a fast food restaurant C. Serena spends $7 to see a movie. D. Stuart earns $10,000 from his 10 percent ownership of Acme Industrial 4. Imagine a society that produces military goods and consumer goods, which we’ll call “guns” and “butter”.A. Draw a production possibilities frontier for guns and butter. Explain why it most likely has a bowed-out shape. B. Show a point that is impossible for the economy to achieve. Show a point that is feasible but ineficient. C. Imagine that the society has two political parties, called the Hawks(who want a strong military) and the Doves(who want a smaller military). Show a point on your production possibilities frontier that the Hawks and a point the Doves might choose. D. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger “peace dividend”, measured by the increase in butter production?Explain. 5. The first principle of economics discussed in Chapter 1 is that people face tradeoffs. Use a production possibilities frontier to illustrate a society’s tradeoff between a clean environment and high incomes. What do you suppose determines the shape and position of the frontier? Show what happens to the frontier if engineers develop an automobile engine with almost no emissions. 6. Classify the following topics a relating to microeconomics or macroeconomics. a. A family`s decision about how much income to save. b. The effect of government regulations on auto emissions. c. The impact or higher national saving on economic growth. d. A firm’s decision about how many workers to hire. e. The relationship between the inflation rate and changes in the quantity of money. 7. Classify each of the following statements as positive or normative. Explain. a. Society faces a short-run tradeoff between inflation and unemployment. (Positive). It is a fact due to the Philips curve. b. A reduction in the rate of growth of money will reduce the rate of inflation. c. The Federal Reserve should reduce the rate of growth of money. d. Society ought to require welfare recipients to look for jobs. e. Lower tax rates encourage more work and more saving.
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 18. Exercises 1-5. The Markets for the Factors of Production. Gregory Mankiw. Principles of Economics. 7th edition. 1. Suppose that the president proposes a new law aimed at reducing healthcare costs: All Americans are required to eat one apple daily. b. How would the law affect the marginal product and the value of the marginal product of apple pickers? 2. Show the effect of each of the following events on the market for labor in the computer manufacturing industry. a. Congress buys personal computers for all U.S. college students. b. More college students major in engineering and computer science. c. Computer firms build new manufacturing plants. 3. Suppose that labor is the only input used by a perfectly competitive firm. The firm’s production function is as follows: a. Calculate the marginal product for each additional worker. b. Each unit of output sells for $10. Calculate the value of the marginal product of each worker. c. Compute the demand schedule showing the Number of workers hired for all wages from zero to $100 a day. d. Graph the firm’s demand curve. e. What happens to this demand curve if the price of output rises from $10 to $12 per unit? 4. Smiling Cow Dairy can sell all the milk it wants for $4 a gallon, and it can rent all the robots it wants to milk the cows at a capital rental price of $100 a day. It faces the following production schedule: a. In what kind of market structure does the firm sell its output? How can you tell? b. In what kind of market structure does the firm rent robots? How can you tell? c. Calculate the marginal product and the value of the marginal product for each additional robot. d. How many robots should the firm rent? Explain. 5. The nation of Ectenia has twenty competitive apple orchards, which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard: 𝑞=100𝑙−𝑙^2 𝑚𝑝𝑙=100−2𝑙 where Q is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor. a. What is each orchard’s labor demand as a function of the daily wage W? What is the market’s labor demand? b. Ectenia has 200 workers who supply their labor inelastically. Solve for the wage W. How many workers does each orchard hire? How much profit does each orchard owner make? c. Calculate what happens to the income of workers and orchard owners if the world price of apples doubles to $4 per apple. d. Now suppose the price is back at $2 per apple, buta hurricane destroys half the orchards. Calculatehow the hurricane affects the income of eachworker and of each remaining orchard owner. What happens to the income of Ectenia as a whole?
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Explanation of Chapter 9. Application: International Trade. Principle of Economics. Gregory Mankiw. The determinants of trade- The equilibrium without trade. The determinants of trade-The world price and comparative advantage. The winners and losers from trade-The gains and losses of an exporting country. The winners and losers from trade-The gains and losses of an importing country. The effects of a tariff. The effects of an import quota. The lessons for trade policy. The argument for restricting trade-The jobs argument. The argument for restricting trade-The national-security argument. The argument for restricting trade-The infant-industry argument. The argument for restricting trade-The unfair-competition argument. The argument for restricting trade-The protection-as-a-bargaining-chip argument
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 15. Monopoly. Principles of Economics. Exercises 1-6. 1. A publisher faces the following demand schedule for the next novel from one of its popular authors: The author is paid $2 million to write the book, and the marginal cost of publishing the book is a constant $10 per book. a. Compute total revenue, total cost, and profit at each quantity. What quantity would a profit maximizing publisher choose? What price would it charge? b. Compute marginal revenue. (Recall that MR =ΔTR/ΔQ.) How does marginal revenue compare c. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity do the marginal revenue and marginal-cost curves cross? What does this signify? d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author were paid $3 million instead of $2 million to write the book, how would this affect the publisher’s decision regarding what price to charge? Explain. f. Suppose the publisher was not profit-maximizing but was concerned with maximizing economic efficiency. What price would it charge for the book? How much profit would it make at this price? 2. A small town is served by many competing supermarkets, which have the same constant marginal cost. a. Using a diagram of the market for groceries, show the consumer surplus, producer surplus, and total surplus. b. Now suppose that the independent supermarkets combine into one chain. Using a new diagram, show the new consumer surplus, producer surplus, and total surplus. Relative to the competitive market, what is the transfer from consumers to producers? What is the deadweight loss? 3. Johnny Rockabilly has just finished recording his latest CD. His record company’s marketing department determines that the demand for the CD is as follows: "The company can produce the CD with no fixed cost" "and a variable cost of $5 per CD." a. Find total revenue for quantity equal to 10,000, 20,000, and so on. What is the marginal revenue for each 10,000 increase in the quantity sold? b. What quantity of CDs would maximize profit? What would the price be? What would the profit be? c. If you were Johnny’s agent, what recording fee would you advise Johnny to demand from the record company? Why? 4. A company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company’s anticipated demand over the lifetime of the bridge: a. If the company were to build the bridge, what would be its profit-maximizing price? Would that be the efficient level of output? Why or why not? b. If the company is interested in maximizing profit, should it build the bridge? What would be its profit or loss? c. If the government were to build the bridge, what price should it charge? d. Should the government build the bridge? Explain. 5. Larry, Curly, and Moe run the only saloon in town. Larry wants to sell as many drinks as possible without losing money. Curly wants the saloon to bring in as much revenue as possible. Moe wants to make the largest possible profits. Using a single diagram of the saloon’s demand curve and its cost curves, show the price and quantity combinations favored by each of the three partners. Explain. 6. The residents of the town Ectenia all love economics, and the mayor proposes building an economics museum. The museum has a fixed cost of $2,400,000 and no variable costs. There are 100,000 town residents, and each has the same demand for museum visits: QD = 10 − P, where P is the price of admission. a. Graph the museum’s average-total-cost curve and its marginal-cost curve. What kind of market would describe the museum? b. The mayor proposes financing the museum with a lump-sum tax of $24 and then opening the museum to the public for free. How many times would each person visit? Calculate the benefit each person would get from the museum, measured as consumer surplus minus the new tax. c. The mayor’s antitax opponent says the museum should finance itself by charging an admission fee. What is the lowest price the museum can charge without incurring losses? (Hint: Find the number of visits and museum profits for prices of $2, $3, $4, and $5.) d. For the break-even price you found in part (c), calculate each resident’s consumer surplus. Compared with the mayor’s plan, who is better off with this admission fee, and who is worse off? Explain. e. What real-world considerations absent in the problem above might provide reasons to favor an admission fee?
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Chapter 11. Public Goodsand CommonResources. Gregory Mankiw. Principles of Economics. 7th edition. The different kind of goods. Examples of public goods. Common resources. Some important common resources
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Chapter 8: Application: The Costs of Taxation. Gregory Mankiw. The deadweight loss of taxation. How a Tax Affects Market Participants. Welfare without and with tax. The determinants of the deadweight loss. Dead weight loss and tax revenue as taxes vary. The deadweight loss and revenue(the Laffer curve)
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 3.Interdependence and the gains from trade. Gregory Mankiw. Principles of economics. Interdependence between countries. Production Possibilities. Specialization and Trade Absolute Advantage Comparative advantage
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Chapter 21. The Theory of Consumer Choice. Gregory Mankiw. Principles of Economics. 7th edition. The Budget Constraint: What the Consumer Can Afford. Preferences: What the Consumer Wants-Representing Preferences with Indifference Curves Preferences: What the Consumer Wants-Representing Preferences with Indifference Curves Preferences: What the Consumer Wants-Four Properties of Indifference Curves Preferences: What the Consumer Wants-Four Properties of Indifference Curves Preferences: What the Consumer Wants-Two Extreme Examples of Indifference Curves Preferences: What the Consumer Wants-Two Extreme Examples of Indifference Curves Optimization: What the Consumer Chooses - 21-3a The Consumer’s Optimal Choices Optimization: What the Consumer Chooses - 21-3a The Consumer’s Optimal Choices FYI-Utility An Alternative Way toDescribe Preferences and Optimization FYI-Utility An Alternative Way toDescribe Preferences and Optimization Optimization: What the Consumer Chooses - How Changes in Income Affect the Consumer’s Choices Optimization: What the Consumer Chooses - How Changes in Prices Affect the Consumer’s Choices Optimization: What the Consumer Chooses – Income and Substitution Effects. Income and Substitution Effects When the Priceof Pepsi Falls Optimization: What the Consumer Chooses – Income and Substitution Effects. Optimization: What the Consumer Chooses – Deriving the Demand Curve Three Applications -Do All Demand Curves Slope Downward? Case study-The search for Giffen Goods Three Applications -How Do Wages Affect Labor Supply? Case Study - Income Effects on Labor Supply: Historical Trends, Lottery Winners, and the Carnegie Conjecture Three Applications -How Do Interest Rates Affect Household Saving? Three Applications -How Do Interest Rates Affect Household Saving? Conclusion: Do People Really ThinkThis Way?
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7. Consider the relationship between monopoly pricing and price elasticity of demand. A) Explain why a monopolist will never produce a quantity at which the demand curve is inelastic. (Hint: If demand is inelastic and the firm raises its price, what happens to total revenue and total costs?) b. Draw a diagram for a monopolist, precisely labeling the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal- revenue curve.) c. On your diagram, show the quantity and price that maximize total revenue. 8. You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers: a. To maximize profit, what price would you charge for an adult ticket? For a child’s ticket? How much profit do you make? b. The city council passes a law prohibiting you from charging different prices to different customers. What price do you set for a ticket now? How much profit do you make? c. Who is worse off because of the law prohibiting price discrimination? Who is better off? (If you can, quantify the changes in welfare.) d. If the fixed cost of the play were $2,500 rather than $2,000, how would your answers to parts (a), (b), and (c) change? 9. Only one firm produces and sells soccer balls in the country of Wiknam, and as the story begins, international trade in soccer balls is prohibited. The following equations describe the monopolist’s demand,marginal revenue, total cost, and marginalcost: a. How many soccer balls does the monopolist produce? At what price are they sold? What is the monopolist’s profit? b. One day, the King of Wiknam decrees that henceforth there will be free trade—either imports or exports— of soccer balls at the world price of $6. The firm is now a price taker in a competitive market. What happens to domestic production of soccer balls? To domestic consumption? Does Wiknam export or import soccer balls? c. In our analysis of international trade in Chapter 9, a country becomes an exporter when the price without trade is below the world price and an importer when the price without trade is above the world price. Does that conclusion hold in your answers to parts (a) and (b)? Explain. d. Suppose that the world price was not $6 but, instead, happened to be exactly the same as the domestic price without trade as determined in part (a).Would allowing trade have changed anything in the Wiknamian economy? Explain. How does the result here compare with the analysis in Chapter 9? 10. Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD: a. Find the price and quantity that maximize the company’s profit. b. Find the price and quantity that would maximize social welfare. c. Calculate the deadweight loss from monopoly. d. Suppose, in addition to the costs above, the director of the film has to be paid. The company is considering four options:i. a flat fee of 2,000 Ectenian dollars.ii. 50 percent of the profits.iii. 150 Ectenian dollars per unit sold.iv. 50 percent of the revenue.For each option, calculate the profit-maximizing price and quantity. Which, if any, of these compensation schemes would alter the deadweight loss from monopoly?Explain. 11. Many schemes for price discriminating involve some cost. For example, discount coupons take up the time and resources of both the buyer and the seller. This question considers the implications of costly price discrimination. To keep things simple, let’s assumethat our monopolist’s production costs are simply proportional to output so that average total cost and marginal cost are constant and equal to each other.a. Draw the cost, demand, and marginal-revenue curves for the monopolist. Show the price the monopolist would charge without pricediscrimination. b. In your diagram, mark the area equal to the monopolist’s profit and call it X. Mark the area equal to consumer surplus and call it Y. Mark the area equal to the deadweight loss and call it Z. c. Now suppose that the monopolist can perfectly price discriminate. What is the monopolist’s profit?(Give your answer in terms of X, Y, and Z.) d. What is the change in the monopolist’s profit from price discrimination? What is the change in total surplus from price discrimination? Which change is larger? Explain. (Give your answer in terms of X, Y, and Z.)
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YOU BELEIVE IN THIS PROJECT! Donate it and you'll support us. https://diegocruz18.wixsite.com/onlineco/donation Chapter 18. The Markets for the Factors of Production. Gregory Mankiw. Principles of Economics. 7th edition Introduction The Demand for labor The Demand for labor-The competitive Profit-Maximizing Firm The Demand for labor-The Production Function and the Marginal Product of Labor The Demand for labor-The Production Function and the Marginal Product of Labor The Demand for labor-The Value of the Marginal Product and the Demand for Labor The Demand for labor- What Causes the Labor-Demand Curve to Shift? The Supply of Labor - The Trade-off between Work and Leisure The Supply of Labor - What Causes the Labor-Supply Curve to Shift? Equilibrium in the labor market Equilibrium in the labor market - Shifts in Labor Supply Equilibrium in the labor market - Shifts in Labor Demand The Other Factors of Production: Land and Capital The Other Factors of Production: Land and Capital - Equilibrium in the Markets for Land and Capital The Other Factors of Production: Land and Capital - Equilibrium in the Markets for Land and Capital The Other Factors of Production: Land and Capital - Linkages among the Factors of Production The Other Factors of Production: Land and Capital - Linkages among the Factors of Production Conclusion
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