Microeconomics
5th Edition
ISBN: 9781319098780
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
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Chapter 2, Problem 14P
To determine
The mayor of Gotham city, worried about the potential epidemic of deadly influenza this winter, ask an economic adviser the following series of questions. Determine whether a question requires the economic advisor to make a positive assessment or a normative assessment.
- How much vaccine will be in stock in the city by the end of November?
- If we offer to pay 10% more per does to the pharmaceutical companies providing the vaccines, will they provide additional doses?
- If there is a shortage of vaccine in the city, whom should we vaccinate first-the elderly or the very young? ( Assume that a person from one group has an equal likelihood of dying from influenza as a person from the other group)
- If the city charges $25 per shot, how many people will pay?
- If the city charges $25 per shot, it will make a profit of $10 per shot, money that can go to pay for inoculating poor people. Should the city engage in such a scheme?
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- Exercise 3 The production function of a firm is described by the following equation Q=10,000-3L2 where L stands for the units of labour. a) Draw a graph for this equation. Use the quantity produced in the y-axis, and the units of labour in the x-axis. b) What is the maximum production level? c) How many units of labour are needed at that point? d) Provide one reference with you answer.arrow_forwardExercise 1 Consider the market supply curve which passes through the intercept and from which the market equilibrium data is known, this is, the price and quantity of equilibrium PE=50 and QE=2000. Considering those two points, find the equation of the supply. Draw a graph of this line. Provide one reference with your answer. Exercise 2 Considering the previous supply line, determine if the following demand function corresponds to the market demand equilibrium stated above. QD=3000-2p.arrow_forwardConsider the market supply curve which passes through the intercept and from which the marketequilibrium data is known, this is, the price and quantity of equilibrium PE=50 and QE=2000.a. Considering those two points, find the equation of the supply. b. Draw a graph of this line.arrow_forward
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