#microeconomic

Submit your completed assignment to the folder. To submit your assignment click on the “Submit Assignment’ button at the bottom of the page. We recommend that you submit your work on Sunday of the week that you start the module. HOMEWORK Assignment Instructions Answer all of the questions below in 2-3 paragraphs each.  Your final submission should be a minimum of two (2) double spaced typed…

Assignment # 2

Submission deadline: November 23, 2017

Marks: 10

1. Why a firm under perfect competition is called price taker? How the price is determined under perfectly competitive market? (4)

2. Explain what is shut down price. How does it guide a firm in its decision whether to continue to operate or make exit in case the firm under perfectly competitive market in the short run incurs loses?…

ECON545 Project 1—Microeconomic Analysis

Question ECON545: Project 1—Microeconomic Analysis The Microeconomic Paper tests your ability to apply economic principles to a business decision. Select one situation from the items outlined below: A to D. Complete the paper on the selected situation as specified below. The completed paper is a professional report and is due in Week 3 (230 points). See the grading rubric at the end of this…

Ottawa ECO 3153 – b Public Sector Microeconomic Analysis

Question b Public Sector Microeconomic Analysis ECO 2110A – Fall 2016 C. Théoret Blue Assignment Instructions 1. 2. 3. 4. 5. 6. 7. Completing an assignment is optional. Please complete the assignment that was randomly allocated to you. Submitting an assignment of a different colour will result in a 0 (zero) score. The course code for the BLUE assignment is ECO2110AB. BLUE answer sheets will be…

Microeconomics : Behavior of Buyers and Sellers ☞ http://on.codek.tv/VkvpS7s3x

Consumption tax and cost-push inflation

Aim of the consumption tax was to reduce consumption

Possibly because of the negative externalities generated by the consumption of the good

However, higher costs of such goods raises cost of living for households (who consume fuel) and cost of production for firms (who also consume fuel to power their factories and processes)

Causes the AS curve to shift up, resulting in inflationary growth and cost-push inflation 

Subsidies --> Budget deficit, Pubic debt, global inequality

Aim of subsidies is to improve income inequality, give workers in certain (declining and agricultural) industries a more decent income, prevent bankruptcies 

Pressure fced from trade unions and advocacy groups that possess significant political clout

However, subsidies can be extremely costly for governments --> incur huge debts and budget deficits that may turn out to be unsustainable and unhealthy

Unnecessary protection of productively inefficient industries (protectionism) is allocatively inefficient as resources are siphoned away from more productive initiatives (like public infrastructure and education)

Negatively affects the country’s long-run growth, especially if resources are prevented from being invested in aforementioned sectors 

Exacerbates global inequality --> agricultural subsidies from the developed countries artificially depress global prices on agricultural produce, undercutting the incomes of third-world countries’ farmers and worsening global income disparity 

The accumulation of huge buffer stocks as a result from the subsidisation of agricultural production in DCs will also contribute to the worsening of global income inequality as these stocks will eventually find their way into the markets of LDCs (as food aid etc)

Act as substitutes to local agricultural produce, oftentimes cheaper substitutes --> diminishes the demand for LDCs’ domestic agricultural products and the incomes of domestic farmers 

Government intervention --> Long-run growth

Government intervention to correct market failures can confer positive externalities and contribute to the country’s potential growth

Case of education

Education is subjected to market failure, namely positive externalities and is a merit good