Microeconomics

When comparing partial equilibrium effects to general equilibrium effe

When comparing partial equilibrium effects to general equilibrium effects one can conclude that A) general equilibrium effects are always larger. B) partial equilibrium effects are always larger. C) the effects are of equal size. D) one cannot determine before the fact which effect is greater.   ANSWER D  

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Date: September 9th, 2020

The high cost of advertising during the Super Bowl will A) not affect

The high cost of advertising during the Super Bowl will A) not affect the efficient level of output because advertising is a sunk cost. B) will affect the efficient level of output because profits will fall significantly. C) not affect the efficient level of output because advertising is a fixed cost. D) Not enough information […]

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Date: September 9th, 2020

Employers in a city must pay a specific tax of $t per hour worked by t

Employers in a city must pay a specific tax of $t per hour worked by their employees while employers in the suburbs of the city do not have an employment tax. What does a general equilibrium approach predict regarding the wages and employment of both the city and suburban workers if the city decides to […]

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Date: September 9th, 2020

Your company makes copper pipes. Over the years, you have collected a

Your company makes copper pipes. Over the years, you have collected a large inventory of raw copper. The production process involves melting the copper and shaping it into pipes. You also have a large stockpile of pennies. Suppose the price of copper rises so much that the copper in the penny becomes worth more than […]

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Date: September 9th, 2020

The saying “What’s that got to do with the price of tea?” reflects A)

The saying “What’s that got to do with the price of tea?” reflects A) two markets where general equilibrium analysis would be most useful. B) two markets where general equilibrium analysis likely won’t be very useful. C) two markets where the products are clearly closely related. D) two markets where firms are incredibly greedy.   […]

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Date: September 9th, 2020