Macro and Micro Economics: Comparison Study - Coursework Example

Macro and Micro Economics Pg. 158-159_ 8, 9 Production costs: space, equipment, land, and capital in the short run, space, equipment, land, capital in the short run, labor and material and capital in the long run Fixed costs include: space, equipment, land, capital in the short run Variable costs: labor and material and capital in the long run. 8. Productivity is measured by calculating the GPA of the units completed during my time at the college, yes. My productivity has changed, the changes in productivity have been gauged by the changes in my GPA. My productivity can be increased by putting in more efforts in my academics so as to impact my GPA positively 9. The economic cost incurred is labor in terms of the time taken to do the assignment. Pg. 160-161_#2, 3, 5. 5 Which plant(s) should be used to produce 40 units? Medium firm Which plant(s) needs to employed in the production of 100 units? Large firm Are there economies of scale in these plant size choices there are economies of scale as the larger the firm the higher the rate of output Pg. 187_ #9 Is Apple Computer a perfectly competitive firm? Explain your answer Apple computer is a perfectly a competitive firm because it operates within a market that has both freedom of entry and exit. On the other had there are many buyers and sellers and the amount of goods are identical Pg. 188_#1, 2, 3, 5 Pg. 210_#10 Pg. 211_#4 Pg. 236_#2, 3, 7 2. According to the Federal Trade Commission (News, p. 230), how often do monopolies lead to higher prices? Why, then, did the rocket merger get approved? Pg.230 3. Why dont monopolists try to establish "the highest price possible," as many people allege? What would happen to sales? To profits? Setting higher prices would attract envious competitors into the market. Sales level would remain the same in the short run and they would enjoy abnormal profits in the short run. However, the sales and profit would decline in the long run 7. What entry barriers helped protect the following? Missing***** (a) The Russian sable monopoly (World View, p. 218). (b) The Live Nation monopoly (News, p. 223). (c) The Intel monopoly (News, p. 228). (d) The rocket monopoly (News, p. 230). (e) Googles search dominance (News, p. 235). Pg. 237_#1, 4 Pg. 261-262_#5, 6, 9 5. If an oligopolistic knows rivals will match a price cut, would it ever reduce its price? No it would not reduce its price because reduction in price will not give it a competitive advantage due to the price match only resulting in a shift in the market equilibrium. 6. How might the high concentration ratio in the credit card industry (Table 11.2) affect the annual fees and interest charges for credit card services? The annual fees and interest rates will increase due to the increase in demand as opposed to supply 9. The Ivy League schools defended their price-fixing arrangement (see p. 253) by arguing that their coordination assured a fair distribution of scholarship aid. Who was hurt or helped by this arrangement The needy were hurt by the arrangement because the price fixing arrangement meant that they were placed in the same category with the children from wealthier backgrounds. The wealthier students benefited as the arrangement meant that they had to pay lesser fees. Pg. 263_#1, 2 Pg. 277_#1, 3, 8 What is the source of Starbucks "confidence" in the News on page 267 1. Name three products each for which you have (a) high brand loyalty and (b) low brand loyalty the high brand loyalty is on the following: Samsung products, McDonald’s burgers and, Pepsi On the other hand, low brand loyalty for: Coca-Cola and, adidas shoes 8. How would our consumption of cereal change if cereal manufacturers stopped advertising? Would we be better or worse off? The consumption of cereal would go down because of absence of persuasion. We would be better off due to consumer sovereignty which is usually affected by advertisements. Pg. 278_# 1, 4 Pg. 299_#4, 5, 6 4. In most cities local taxi fares are regulated. Should such regulation end? Who would gain or lose? The regulation should not end so that people may not be exploited. The taxi operators lose from the regulation but the passengers gain. 5. Pg.290 6. The Telecommunications Act of 1996 requires local phone companies to charge "reasonable" rates for transmission access (News, p. 292). What is a "reasonable" rate? A reasonable rate is an affordable rate that does not exploit consumers Pg. 300-301_#1, 4, 5 Pg. 321_#1, 2, 8 Pg. 323_#1 ,4, 5 Pg. 363_#7, 9 10 7. Who is hurt and who is helped by an increase in the legal minimum wage? Under what circumstances might a higher minimum not reduce employment? An increase in the legal minimum wage helps workers as it increases their income. The employers are always hurt by this increase as it increases costs. If there is a higher productivity of workers then an increase in the wage minimum will not reduce employment 9. Is it possible that the president of the United States is overpaid? How should his MRP be measured? 10. The minimum wage in Mexico is less than $1 an hour. Does this make Mexican workers more cost-effective than U.S. workers? Explain. It makes the Mexican workers to be more cost effective as they are paid less thus saving on costs. Pg. 364_#3, 4, 7 Pg. 383_#2, 5, 6 2. Does a strike for a raise of 5 cents an hour make any sense? What kinds of long-term benefits might a union gain from such a strike? The strike does make sense. This is because in the long run the unions will have political power after they are granted their wish 5. The firms that are nonunionized incline to bid wage tariffs that are closer to those rates paid by the firms that are not unionized in the same industry. How do you explain this? They offer close wage rates so that their workers will not get poached and at the same time save on costs and have a competitive advantage 6. Why are farmworkers much less successful than airplane machinists in securing higher wages? Farmworkers are considered to be the informal workers as compared to airplane machinists who are considered to be more formal workers. References Africa, A., & Booysen, M. (2001). Micro- and macro economics. Sandown: Heinemann. Dutta, S. (2006). Introductory economics (micro and macro): A textbook for class XII. New Delhi: New Age International (P) Ltd., Publishers. Read More