Ecn361 topic 1 - Study guides, Class notes & Summaries

ECN Topic 7 DQ 1 In many college towns, private independent bookstores typically locate on the periphery of the college campus. However, in some college towns, the university has used political power to restrict private bookstores near campus through community zoning laws. Use your knowledge of markets to predict the price and quality of service differences in the market for college textbooks under the two different market regimes.

ECN Topic 8 DQ 1 Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low.

1. Question: While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms' owners, workers, and customers. This statement illustrates the principle that 2. Question: Which of the following is an example of a normative, as opposed a to positive, statement? 3. Question: Refer to Table 2-2 .What is the opportunity cost to Footville of increasing the production of ...

Topic 3 DQ 1: Consider the market for white athletic socks, which consumers consider to be identical products. If the demand is very elastic and the supply is very inelastic, how would the burden of a new tax on athletic socks be shared between consumers and producers? What if the situation were reversed – a very inelastic demand and a very elastic supply? How would that change the way consumers and producers share the burden of the new tax? Justify your answer.

ECN Topic 6 DQ 1 Suppose that a small family farm sold its output for $100,000 in a given year. The familyspent $25,000 on fuel; $40,000 on seed, fertilizer, and pesticides; and $25,000 on equipment, including maintenance. The family members could have earned $20,000 working at other occupations. What is the family's accounting cost? What is the family's economic cost? Could the family's economic cost ever exceed its accounting cost? Why?

Topic 4DQ1 The creation of knowledge is a public good. Because knowledge is a public good, profit-seeking firms tend to free-ride on the knowledge created by others and, as a result, devote too few resources to the creation of knowledge. How does the U.S. government correct for this apparent market failure?

Topic 2 DQ 1: Explain the difference between change in quantity demanded and shift in demand. What causes change in quantity demanded? What causes a shift in demand?

Topic 1 DQ 1: If the United States could produce five televisions per hour of labor and China could produce three televisions per hour of labor, would it necessarily follow that the United States should specialize in television production? Why or why not?

Topic 1 DQ 2: Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade patterns, absolute advantage or comparative advantage? Why?

Topic 5 DQ 1 List and briefly explain each of the four properties of indifference curves. Provide an example where you have made a buying decision based on one or more of these properties. Justify your answer.