BRANDEIS UNIVERSITY Department of Economics Economics 10a Mr. Coiner Introduction to Microeconomics Fall‚ 2012 Problem Set 2 1. This question examines the impact of 5 events on the market for large automobiles with relatively low gas mileage and relatively high emission levels (think Hummer). Answer each part separately. For each event‚ indicate which curve (D or S) shifts‚ indicate in which direction (left or right) it shifts‚ and show in a demand-supply diagram in which
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Topic 10: The Transition Period I. The Free Trade Era in Europe. During the mercantilist era‚ trade was seen as a zero-sum game: one country’s gain was another country’s loss. If Spain imported more from England that she exported to England‚ she had to send specie to England to make up the difference. In the mercantilist view‚ this was viewed as a loss for Spain and a gain for England. So‚ countries established policies to encourage favorable trade balances: they subsidized export industries
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DEFINITION Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people. Economics may be defined as a science that deals with the activities of man in obtaining wealth for the satisfaction of his wants. Economics is the art of making a living. Economics is the proper allocation and efficient use of available resources for the maximum satisfaction of human wants. Economics is the branch of social science
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1. State and explain any two advantage of a monetary economy. State and explain any three functions of money. In monetary economy is an economy where goods and services are exchanged for money. It can avoid double coincidence of wants‚ for example‚ one person is willing to use a bag of rice to get a bag of tea; another person is willing to use a bag of tea to get two apples. These two parties can not trade easily for their goods because in a barter economy people have to find exact goods and
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1. List the three largest categories that make up the market basket that is used to compute CPI. According to Figure 1 in our textbook‚ there are many categories that make up the market basket used to calculate CPI. They are Housing‚ Transportation‚ Food and beverages‚ Medical care‚ Recreation‚ Education and communication‚ Apparel‚ and other. The three largest categories consist of Housing at 43%‚ Transportation at 17% and Food and beverages at 15%. These three combined make up 65% of the market
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Economics 515 AU12 Midterm 3 Review The exam will have 10‚ 10-point questions on it from the questions below. 1. Explain briefly how guns and steel aided in Europeans’ attempts to conquer the native population of Africa and the Americas. How did germs work in favor of European conquest against the Incas? How did germs work against the Europeans in their imperialist efforts in Africa? 2. Describe the attempt of Europeans to colonize Africa depicted in Guns‚ Germs‚ and Steel
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1. Would Henry Hazlitt more likely: a. Say we are already suffering the long-run consequences of the policies of the remote or recent past. b. Advocate public or collective ownership and administration of the means of production and distribution of goods. c. Argue for more governmental stimulus to help the economy. 2. Would Henry Hazlitt more likely say: a. That government should fund public works to maintain full employment. b. The art of economics consists in looking not merely at the
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FINAL 224 Chapter 3: Economic Crisis & Recovery 1929-1939 Europe in a Depression(1929 till 1932-33) • Origin of the 1929 Downturn - The real origin of the slump had to be located with the US. This does not mean that there were no cyclical weaknesses elsewhere but it is mainly US bcz it had a major influence on the world economy. - The US witnessed 2 major shocks: 1- decrease (Curtailment) of foreign lending 1928-29 which had a deflation impact on
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How can bursting of an asset-price bubble in the stock market help trigger a financial crisis? * When this happens the price of the bubble will realign with their fundamental economic values‚ companies will see their net worth decline and the value of their collateral they can pledge will drop. It causes a decline in the value of the institutions’ asset‚ whereby causing a decline in the net worth of the company. This deterioration in the balance sheets causes them to deleverage‚ worsening
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Homework 1 Question 1 1. Managerial economics is best defined as the economic study of how business can B. decide on the best use of scarce resources. Question 2 1. Which of the following statements best illustrates the use of the market process in determining the allocation of scarce resources? A. "We should consider shifting to products where we can earn more money." Question 3 1. One key question from the "One lession of business" might be A. should the firm be in the business in which
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