Determine the social optimal price and quantity. Find consumer and producer surpluses under the social optimal condition. Determine the monopolistic price and quantity. Find consumer and producer surpluses under the monopoly condition. What is the deadweight loss caused by monopoly?

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  1. Firm’s cost function shows the relationship between total cost (C) and output (Q).
  2. Derive the cost function by minimizing C = 2K + 10L subject to a production function of Q = K5L0.3.
  3. Does the average cost (AC) increase with output level? Show your work.
  4. Is the marginal cost (MC) greater than the average cost? Show your work.

 

 

  1. Suppose that a consumer has a Cobb-Douglas utility function U(X,Y)=100X0.4Y0.8 , where X and Y are quantities of goods X and Y consumed, with a budget constraint of PxX + PyY = M, where Px, Py, and M are the price of X, price of Y, and income (money), respectively.
  2. Determine the demand functions of goods X and Y,
  3. Write out the indirect utility function, V,
  4. Prove that λ = ∂V/∂M.

 

 

  1. Given an (inverse) demand function P = 485 – 5Q and the marginal cost curve

MC = 5  – Q + Q2.  (Keep at least two decimal points in your calculations.)

  1. Determine the social optimal price and quantity.
  2. Find consumer and producer surpluses under the social optimal condition.
  3. Determine the monopolistic price and quantity.
  4. Find consumer and producer surpluses under the monopoly condition.
  5. What is the deadweight loss caused by monopoly?

 

 

 

Analyze what would happen to the equilibrium price and quantity in the market for Pepsi if the following occurred. Briefly explain your answers

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Market Equilibrium and Taxes

In this assignment, you will examine different factors that affect supply and demand, and also supply and demand equations to calculate the equilibrium price and quantity. In addition, you will evaluate the effects of imposing per unit tax on market price, quantity and economic welfare.

Instructions: This assignment requires a combination of short paragraph answers and computations. You are required to follow proper APA format. Read the Criteria section below for more information before you begin this assignment.

1. Analyze what would happen to the equilibrium price and quantity in the market for Pepsi if the following occurred. Briefly explain your answers.
a. The price of Coke decreases.

b. Average household income falls from $50,000 to $43,000.

c. There are improvements in soft-drink bottling technology.

d. The price of sugar increases and the Pepsi launches an extremely successful advertising campaign.

2. Analyze the following demand and supply equations to answer the questions.

Demand Equation: Qd = 100 – 4P

Supply Equation: Qs = 10 + 6P

a. What is the equilibrium price? What is the equilibrium quantity?

Hint: Equate Qd = Qs. Solve for the equilibrium price and then the quantity.

b. Assume the government places a price ceiling at $7 in the market. What is quantity demanded? What is quantity supplied? Is there a shortage or a surplus?

3. Using the diagram below, answer the following questions:

(Description of graph: The following diagram shows the effects of tax increase on price and quantity of cigarettes. The initial equilibrium values before tax increase occurs at the equilibrium Quantity of 20 billion packs of cigarettes at the equilibrium price of $4.50. Assume the government increases the tax rate on cigarettes per pack, and this action of the government shifts the supply curve to the left. The new equilibrium values after tax increase are new equilibrium Quantity of 18 billion packs of cigarettes at the new equilibrium price of $5.50. Note also that the minimum producers’ price along supply graph at new equilibrium after tax increase is $4.25 per pack of cigarettes.)

a. How much is the per-unit (pack) tax on cigarettes? Show your wo325rk.

b. What price do consumers pay after the tax?

c. How much tax revenue is collected? Show your work.

d. What is the amount of deadweight loss after the tax is imposed on cigarettes? Show your work.

Classify civilian labor force in Riverside into one of the following unemployment types: structural, cyclical, and frictional unemployment and explain why. Calculate how many of civilian labor force in Riverside would fall into each type of unemployment.

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Case Study

Suppose you are a junior macroeconomists working for an economic consulting firm in California. Recently you are assigned to tasks with four important economic issues.

Task 1: Categorize the following groups of people by different types(structural, cyclical, or frictional) of unemployment and report it to the BLS (Bureau of Labor Statistics) in a month. The document you receive has the following information:

“There are 330,000 people reside in Riverside. Among them, 40% of the population is civilian labor force. The 15% of civilian lost their jobs because their job skills are not required any longer. 30% of civilian workers are unemployed because the economy is busted. 55% of remaining civilian workers are actively looking for jobs.”

Classify civilian labor force in Riverside into one of the following unemployment types: structural, cyclical, and frictional unemployment and explain why.
Calculate how many of civilian labor force in Riverside would fall into each type of unemployment.

Task 2: You were notified by researchers from the BEA (Bureau of Economic Analysis) that a recent growth in consumer’s confidence index decreased by 20%, while recent technological breakthrough in medical and cell phone industries led to a cost savings and an increased productivity across the nation.
(Note that consumer confidence index (CCI) measures the degree of optimism that consumers feel about the overall state of the economy, and the higher the CCI, the higher the consumption.)

Discuss the change in price level and real GDP based on the events occurring in the scenario (Hint: study aggregate demand and supply shifters)

Task 3: Recently, the US began to import wine from France. There are some opponents that argue imports will cut the price of domestic wine, leading to a decrease in the number of jobs in the US wine industry.
Provide counter-evidence that imports will bring overall benefits to our nation in terms of improving the total welfare (sum of consumer and producer surplus).

Task 4: The exchange rate between dollar (US currency) and yen (Japan currency) was 120¥/$; and the exchange rate between dollar (US currency) and euro is 1.3€/$ in 2014, and the exchange rate increased to 130¥/$ and 1.5€/$, respectively in 2015.

Predict the pattern of export and import between those three countries in 2015 compared to 2014. In other words, would exports from US to Japan and European countries increase or decrease? Would imports from Japan and European countries to US increase or decrease?

Complete a research paper over a current economic topic. The topics can be about anything as long as you can relate it to economics somehow.

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ECONOMICS RESEARCH PAPER


Description:
• Complete a research paper over a current economic topic. The topics can be about anything as long as you can relate it to economics somehow. This doesn’t have to be just a boring paper on GDP. Make it interesting.

o Minimum of 2 sources
o Include a title page and work cited page
o 2–4 pages in length (this does not include title page and work cited)
o MLA format

• Relate the current topic to economic principles covered in this course.
• Sample topics: You don’t have to do one of these. Come up with something way more interesting. Make sure you tie this into Economics.
o Federal government budget deficits
o Unemployment Rate
o US Tax Policy
o Regulation of US Banking System
o Welfare and Drug Testing
o Prison Systems
o Immigration
o Government spending
o War
o Walmart and the Economy
o Why Drug Dealers live with their mom’s
o Economic growth and obesity
o This is an interesting site that has some ideas: https://www.forbes.com/sites/advisor/2016/10/24/10– offbeat–economic–indicators/#2e6f20126f64

Explain what the ‘ultimatum game’ and the ‘trust game’ are, and what the commonly observed choices in these games imply about behaviour using the language of reciprocity.

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Behavioural economics

A1.   Explain what the ‘ultimatum game’ and the ‘trust game’ are, and what the commonly observed choices in these games imply about behaviour using the language of reciprocity.

 

A2.   The cost of going to the gym is comprised of a monetary cost of 7 and a psychological cost, the monetary equivalent of which is 8. The benefit from going to the gym – which is enjoyed the period after going to the gym – is 20. Suppose that Sarah has  preferences with  and . Show that Sarah will plan to go to the gym but when the time comes won’t go. How does joining a gym with a monthly membership (so she doesn’t have to pay the monetary cost at the point of going) change the situation?

 

A3.   In the context of a ‘p-beauty contest’, briefly describe how a level-k model of non-equilibrium strategic thinking works to explain the commonly-observed pattern of behaviour in such games.

 

A4.   Harry is in secondary school. He typically has slightly below average academic attainment but usually works hard. His class has been separated into three groups according to ability: low; medium; and high. Harry has been allocated to the low group. His teacher has noticed that he is working less hard in class and has started to fall behind. As a response, she moves him to the middle ability group. Use the ideas of reference dependence, with reference points influenced by peer group, loss aversion and diminishing sensitivity to explain why this might be a good idea to improve Harry’s educational attainment (you may assume that educational attainment is increasing in effort).

 

A5.   Popcorn at the cinema is available in three sizes, small, medium and large. The prices are as follows: small is £4; medium is £6.50; and large is £7. By appealing to appropriate behavioural economics concepts, explain the rationale behind this pricing strategy.

 

A6.   In a city, 80% of taxis are black, and 20% are blue. A witness to a hit-and-run accident involving a taxi identified the taxi as blue. She correctly identifies colours 90% of the time. What is the probability that the taxi involved in the accident is blue? Carefully explain why this is not 90%.

 

B2.   Outline the structure of the prisoners’ dilemma and discuss how this game provides us with a lens through which to understand externalities. Describe and explain how Rabin’s (1993) ‘fairness’ model of intentions-based reciprocity applies to a prisoners’ dilemma setting. If a policy maker’s objective is to achieve ‘cooperative’ outcomes, what would their approach look like if they believed in the pure self-interest hypothesis, and how would this differ if they believed people exhibited sufficiently strong reciprocity. Apply your ideas to one appropriate real-world example.

 

Demonstrate your understanding of how supply and demand differ between monopolies and perfectly competitive markets and how these two markets determine the quantity supplied and market prices. Provide explanations of how the price effect and the quantity effect cause marginal revenue to be different from the price.

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Monopolies and competitive markets

In this assignment, you will demonstrate your understanding of how supply and demand differ between monopolies and perfectly competitive markets and how these two markets determine the quantity supplied and market prices. You will also provide explanations of how the price effect and the quantity effect cause marginal revenue to be different from the price. Finally, you will demonstrate your understanding of the impact of different government price regulations on monopolies.

Define and calculate six major cost elements of a business when given the total costs and the quantity produced. Use the computed costs to determine a minimum cost output level for that business. Compute both the break-even price and the shutdown price for a hypothetical business in a perfectly competitive market.

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Apply critical thinking to use principles of sound reasoning.

Assignment

In this assignment, you will define and calculate six major cost elements of a business when given the total costs and the quantity produced. You will then use the computed costs to determine a minimum cost output level for that business. Next, you will compute both the break-even price and the shutdown price for a hypothetical business in a perfectly competitive market. Finally, you will determine if that business would incur an economic profit at various market prices and assess if the business should continue to produce at each of those price levels.

critically analyses the main causes of change in the above macroeconomic variables and proposes and evaluates three options of how management can deal with the impact that the above macroeconomic variables have on your company. 

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Research the current state of macroeconomic variables for the UK

You should study the notes on this page carefully before proceeding to the task on p.2.

This individual individual assignment is worth 70% of the overall module mark, with a word count of 3,500 +10%. You should avoid –10% because then you might run the risk of not addressing the assignment task sufficiently.

The assignment must be submitted electronically via Turnitin. If the module leader suspects that the submitted assignment is not the work of its author, the submitting student may be called for a viva (oral presentation) on the topics of the assignment.

Refer to the module handbook on Blackboard for the LOs assessed by this assignment, the marking criteria, as well as the assignment’s connection with employability.

 Notes

  • your report should include an introduction and a conclusion, but NO Executive Summary or Abstract
  • Avoid personal opinions and unsubstantiated claims. Therefore, engage with what the references say in relation to the questions (instead of simply adding references to the discussion). This helps you to justify and substantiate. To do so, use Author (year) as part of your sentence structure alongside simply adding (Author, year) to the end of a sentence.
  • In your answers, do not restate the assignment questions using your own words.
  • Avoid mini literature reviews because they do not address a question; avoid lengthy introductions to an answer.
  • Avoid bullet points. Instead, we need a fluid discussion with only a few subheadings. This means that the structure of the discussion comes from ordered and precise thinking, but not from using lots of subheadings.
  • Your discussion must be explicit and specific. This means that vague, implicit and implied answers will be insufficient.
  • in your reference list at the end, only list the sources that you actually used in the main text

Task

You have been appointed as an economic advisor to top-level management in a UK-based company.

Research the current state of play of the following macroeconomic variables for the UK, including relevant current statistics and graphs:

  1. Inflation
  2. Economic Growth
  • Employment and unemployment
  1. Balance of Payments

Compose a report to the top managers of your company that:

1) critically analyses the main causes of change in the above macroeconomic variables;  60 marks

and

2) proposes and evaluates three options of how management can deal with the impact that the above macroeconomic variables have on your company.  40 marks

Develop a position related to your topic and support that position through online research. States the problem/issue/topic you have selected. Summarizes your position on the topic, anticipating your conclusion.

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Econ paper

The term paper for this course is an open-ended assignment that is intended to sharpen your writing, research and critical analysis skills. The project is designed to ensure that you are familiar with the process of collecting financial/economic data from the web and analyzing it using the concepts and theories learned in class. The paper should focus on a topic of your choosing related to material covered in the course. You should develop a position related to your topic and support that position through online research. Possible topics include:

• Raising/lowering Interest rates
The paper should begin with a concise summary paragraph that:

(1) States the problem/issue/topic you have selected

(2) Summarizes your position on the topic, anticipating your conclusion.

The remainder of the paper should explain and support your position.

Discuss the consequences of increasing interest rates on the US economy, taking into consideration the global ramifications.

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Econ dis

Monetary policy in the US, especially the desire to increase interest rates, will have international repercussions. One of these will be to strengthen an already strong dollar.  Discuss the consequences of increasing interest rates on the US economy, taking into consideration the global ramifications.