Microeconomics
5th Edition
ISBN: 9781319098780
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
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Question
Chapter 1, Problem 5P
To determine
how to use the principle of marginal analysis make decisions in the following situations.
- Deciding how many days to wait before doing your laundry.
- Deciding how much time to spend researching before writing your term paper.
- Deciding how many bags of chips to eat
- Deciding how many class lecturers to skip.
Concept Introduction:
Marginal Analysis: Marginal analysis is used to compare the benefits and cost derives out of a specific action. The marginal changes refer to the small incremental adjustment to a plan of action
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Labor Market Data
Price
$5
$10
$15
$20
$25
3,000,000 6,000,000 9,000,000 12,000,000 15,000,000
Qd 15,000,000 12,000,000 9,000,000 6,000,000 3,000,000
Price
$30
$25
$20
$15
$10
$5
+
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x-
3 6
Do
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Quantity (In millions)
Area of a triangle = 1/2* base *height
Market Efficiency & Total Surplus
Worth Publishers
SCENARIO:
The state government is considering raising the minimum
wage from $15 per hour to $20 per hour over the next 3
years. As an economic advisor to the governor, you have been
asked to provide a recommendation on whether the minimum
wage should be increased based on economic theory.
Consider the labor market data provided.
Prepare a brief report that:
1. Explains whether the labor market is currently efficient at the
equilibrium wage of $15 per hour. How would you know? At
equilibrium, what (dollar amount) is the Total Surplus this market
provides? Show your rationale with numbers.
2. Analyzes the impact on total surplus in the market if the
minimum wage is raised…
Draw the IS-LM diagram at equilibrium and use it to show how one or both of the curves change based on the following exogenous changes.
An increase in taxes.
An increase in the money supply
An increase in government purchases
Don't use Ai.
Answer in step by step with explanation.
Knowledge Booster
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