4. What are the costs and benefits of the following scenario? a.) The government implements a price control for with price greater than $10,000 must be made available for only $2,000. any drug b.) The government offers a half billion prize to the first drug company that develops a vaccine for Coronavirus. c.) The FDA reduces the patent length for drugs to treat Alzheimer's disease from 17 years to 7 years, and all current natents for such drugs that are already more than 7 vears old

4. What are the costs and benefits of the following scenario? a.) The government implements a price control for with price greater than $10,000 must be made available for only $2,000. any drug b.) The government offers a half billion prize to the first drug company that develops a vaccine for Coronavirus. c.) The FDA reduces the patent length for drugs to treat Alzheimer's disease from 17 years to 7 years, and all current natents for such drugs that are already more than 7 vears old

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 14 parts a-d
The Placebo Drug Company holds a patent on one of its discoveries. Assuming that the production of the drug involves rising marginal cost, draw a diagram to illustrate Placebo’s profit-maximizing price and quantity. Also show Placebo’s profits. (10 points) Now suppose that the government imposes a tax on each bottle of the drug produced. On a new diagram, illustrate Placebo’s new price and quantity. How does each compare to your answer in part (a)? (10 points) Although it might not be easy to see in your diagrams, the tax reduces Placebo’s profit. Explain why this must be true. (5 points) Instead of the tax per bottle, suppose that the government imposes a tax on Placebo of £110,000 regardless of how many bottles are produced. How does this tax affect Placebo’s price, quantity and profits? Explain. (Hint: Additional unit produced won’t affect the tax amount). (10 points)
QUESTION 48 48. Assuming the demand for illegal drugs is inelastic in the relevant range of prices and the supply of illegal drugs is relatively elastic, what will be the impact of a government drug policy that is aimed at curtailing the flow of drugs into the country? a) the quantity of drugs consumed will not change very much while the price will increase significantly, and the policy will be, to a large extent, self-defeating, as the increase in price will increase the suppliers' financial resources. b) the quantity of drugs consumed will be significantly reduced. c) the price of drugs will not be affected very much. d) none of the above.
It has been estimated that the herd immunity threshold for the H1N1 flu of 2009 was 25% but that for the H1N1 flu of 1918 it was 74%. In most years, the herd immunity threshold for the flu is around 50%. The herd immunity threshold is a function of the contagiousness of the flu strain and the effectiveness of the flu shot. There was no flu shot in 1918, the herd immunity in 1918 came from people having had the flu and subsequently having immunity.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The figure to the right shows the market for one-bedroom apartments in Calgary. If this market is initially unregulated, thousand units will rent for a price of $ per month. Suppose however, the city imposes the controlled price shown in the figure. In this case, in the short run, the market experiences an excess of thousand units. In the long run, if the controlled price remains in place, the market will show a of thousand units. This analysis indicates that as time passes, rent controls will cause housing shortages to Rental Price ($ per month) 905 610 Rental Housing Market Sshort run Slong run Controlled Price 24 50 60 Quantity of Rental Units (Thousands)
A publishing house sells two books, Mopey Dick (a book about a private detective from the backwoods of Vermont) and Moby Dick (the Melville classic). Moby Dick has three times the demand of Mopey Dick. In other words, at each and every price level, three times as many copies of Moby Dick would be sold. For both books, assume that average costs of production are constant and equal. Would it be inconsistent with profit maximization for the publisher to charge the same price for these two books that are differentially successful?
This is from my microeconomics class, Mankiw Chapter 12. It is one question broken up into two parts. 1) A Culinary Conundrum Assume that Georgetown University President John DeGioia is interested in encouraging healthier eating habits on the part of Georgetownstudents. Assume further that Georgetown Students have two options for their meals: they can eat in the cafeteria on campus or at one of the fancy restaurants in the surrounding neighborhood. Meals on campus are healthier than most off-campus options, so President DeGioia would like to encourage students to eat on campus more often. However, students think it’s fun to go off campus for their meals when they can afford to do so. Thus,you should consider on-campus meals to be inferior good standoff-campus meals to be normal goods. a.) True, false, or uncertain: if President De Gioia orders the cafeteria to lower the price of its meals, students will eat on campus more often. Explain your answer. b.) True, false, or…
What would likely be the impact on health care costs if a government implements price controls on pharmaceuticals? A. Health care costs would increase due to higher administrative overhead. B. Health care costs would decrease as drug prices are directly reduced. C. Health care costs would remain unchanged, as other expenses would rise to offset drug cost savings. D. Health care costs would initially decrease but eventually lead to shortages and higher costs in the long term.
You are a monopolist making a durable good, the widget. Some of your customers have started to sell their used widgets to others. Assume the used and new widgets are perfect substitutes, but with 2 used equivalent to one new widget. a.) what effect would an increase in cost for new widgets have on the price of new and used widgets? b.) You consider trying to get the used widgets market made illegal. If this were done perfectly, how would it affect your monopoly's price and profits? show this graphically and in words
Deadweight Loss and Demand Elasticity. Using the linked figure as a starting point, consider a similar product that has the same monopoly price and quantity ($18 and 200 doses), but a more elastic demand. The long-run marginal cost is the same ($8). a. A more elastic demand generates a market demand curve. C Price ($) $18 b C $8 Long-run marginal cost and market supply Market Demand :200 400 Doses of drug per hour
Sara buys fresh salmon for $5 per pound from Pike Place Market on Saturday morning and sells them for $12 per pound at a local fish market. Any salmon not sold that day needs to be disposed of properly. The disposal cost is $1 per pound. Kelly believes that demand for salmon is uniformly distributed between 120 to 190 pounds. How many pounds of salmon should she order each day? a) What is the cost of underestimating demand for salmon? $ (round your response to two decimal places) b) What is the cost of overestimating demand for salmon? $ (round your response to two decimal places (round your response to the nearest whole number) How many pounds should she order on Saturday morning?