Macroeconomics: Private and Public Choice
15th Edition
ISBN: 9781285453545
Author: Russell Sobel; Richard Stroup; James Gwartney; David Macpherson
Publisher: South-Western College Pub
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Chapter ST6, Problem 5CQ
To determine
The secondary effects of limiting imports.
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Which of the following factors tend to decrease the wage differential between union and non union workers:
unions tend to organize the firms with the lowest ability to pay initially
all of the above
unions must moderate their wage demand to keep workers competitive
some nonunion employers pay their employees above union wages
only ‘a’ and ‘b’ above
The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry.
Price (dollars)
24
8
MC
ATC
MR
30
D
45 50
Quantity/time
The firm will maximize its profit at a quantity of
units.
After choosing the profit maximizing quantity, the firm will charge a price of
The firm will receive $
in revenue at the profit-maximizing quantity.
The total cost of production for this profit-maximizing quantity is S
The maximum profit the firm can earn in this situation is $
per unit for this output.
How will the situation change over time?
Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost.
◇ Losses will induce firms to leave this market until the profit maximizing price falls to zero.
The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity.
This market is already in long-run equilibrium, and will not…
Explain how are kids well being with the poverty simulation.
Chapter ST6 Solutions
Macroeconomics: Private and Public Choice
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- Case Study: The Impact of Ebola on Tax Revenue in the DRC Background: The Democratic Republic of the Congo has experienced mulitiple outbreaks, with the 2018-2020 outbreak being one of the most severe. The outbreak had profound effects on public health, the economy and government operations. The DRC's economy already fragile due to policital instability and conflict, faced additional stain as the Ebola virus spread across several provinces. Economic disruption: The Ebola outbreak led to significant disruptions in the affected regions. Businesses were forced to close or reduce operations due to quarantine measures and the fear of contagion. this resulted in a sharp decline in economic activities, particularly in sectors such as agriculute, mining and trade. reduced consumer spending and interruptions in supply chains further exacerbated the economic downturn. Impact on Tax Revenue: the economic…arrow_forwardKey shortcomings of the Human Capital approach to measuring the monetary value of benefits of new treatments are that it Will generate lower benefits for male lives on average Will generate higher benefits for female lives on average Will tend to OVERVALUE improvements in quality of life Will tend to UNDERVALUE improved survival for people out of labour forcearrow_forwardOne of the key concepts in economics that underpins the necessity of making tough choices and confronting difficult tradeoffs through some form of collective decision-making is called Production Consumption Exchange Equity Scarcityarrow_forward
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