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Macro & Micro economics

There are four market structures – perfect competition, monopolistic competition

There are four market structures – perfect competition, monopolistic competition, oligopoly, and monopoly.
Visit a retailer that you feel has the characteristics that are most close to the monopolistic competitive market structure. (2 marks) *** Due to self-isolation from the virus, you can recall from a previous visit.
Provide the name and location of the retailer (You can use online retailers. If you do, provide the website).
Describe its characteristics and how they differ from a perfect competition market structure.
Visit a retailer or business that you feel has the characteristics that are most close to an oligopoly market structure. (2 marks) *** Due to self-isolation from the virus, you can recall from memory or conduct research.
Provide the name and location of the retailer or business (If you use online organizations, provide the website).
Describe its characteristics and how these differ from the characteristics of a monopoly.
Respond to at least two classmates. (1 mark)
In your original post, number your responses as 1a, 2a, etc to match the above requirements.
*** Plagiarism will result in a zero grade. This discussion is based on your personal opinion and experience.

Categories
Macro & Micro economics

What was the effect on inflation?

Background
Policymakers ramped up both fiscal and monetary policy in order to counteract the plunge in economic activity during the Covid-induced recession in 2020.
Part A
The first part of this section describes the fiscal policies implemented in response to the plunge in economic activity. The second part describes the monetary policies. Follow the instructions for either the Monetary or Fiscal Policy sections and then do Part B.
Choice 1) Fiscal Policy: Congress and the Administration (Presidents Trump and Biden) sent a total of three rounds of payments to people who were eligible: $1,200 in April 2020, $600 in December 2020, and $1,400 in March 2021.
You can see the impact of these payments by looking at disposable personal income (FRED ticker: DSPI). i) Paste in a chart from FRED showing the level of disposable income from 2019 through 2022.
Part B
Use the Aggregate Demand and Supply Model to explain the goal of the policies implemented during the recession.
Before the stimulus
Draw a chart showing how Aggregate Demand and Short-term and long-term Aggregate Supply changed during the early stages of the lockdown—before the stimulus programs were implemented. Be sure to label the chart correctly. Include in your description how the short-term equilibrium differed from the long-term equilibrium. You can use figure 13.6 on page 457 in the text as a guide, but the circumstances here are different so your chart will not look the same. Refer to the class Lecture Slides if you need a refresher on what happened during Covid.
After the stimulus
Referring to the chart you drew, which curve did the policy actions attempt to change? (No need to draw another chart).
Did the policies succeed in restoring full employment? (Look at a chart of UNRATE in FRED, no need to include the chart in your writeup).
What was the effect on inflation? (Look at a chart of CPIAUCSL % Change from Year Ago, again no need to include the chart in your writeup).
In retrospect, do you think that the policy actions were needed and of the right magnitude? Should policymakers have done some things differently?
ii) Point out how the stimulus payments affected disposable income. You can place notations on the chart or just write out a description in your text.

Categories
Macro & Micro economics

What was the effect on inflation?

Background
Policymakers ramped up both fiscal and monetary policy in order to counteract the plunge in economic activity during the Covid-induced recession in 2020.
Part A
The first part of this section describes the fiscal policies implemented in response to the plunge in economic activity. The second part describes the monetary policies. Follow the instructions for either the Monetary or Fiscal Policy sections and then do Part B.
Choice 1) Fiscal Policy: Congress and the Administration (Presidents Trump and Biden) sent a total of three rounds of payments to people who were eligible: $1,200 in April 2020, $600 in December 2020, and $1,400 in March 2021.
You can see the impact of these payments by looking at disposable personal income (FRED ticker: DSPI). i) Paste in a chart from FRED showing the level of disposable income from 2019 through 2022.
Part B
Use the Aggregate Demand and Supply Model to explain the goal of the policies implemented during the recession.
Before the stimulus
Draw a chart showing how Aggregate Demand and Short-term and long-term Aggregate Supply changed during the early stages of the lockdown—before the stimulus programs were implemented. Be sure to label the chart correctly. Include in your description how the short-term equilibrium differed from the long-term equilibrium. You can use figure 13.6 on page 457 in the text as a guide, but the circumstances here are different so your chart will not look the same. Refer to the class Lecture Slides if you need a refresher on what happened during Covid.
After the stimulus
Referring to the chart you drew, which curve did the policy actions attempt to change? (No need to draw another chart).
Did the policies succeed in restoring full employment? (Look at a chart of UNRATE in FRED, no need to include the chart in your writeup).
What was the effect on inflation? (Look at a chart of CPIAUCSL % Change from Year Ago, again no need to include the chart in your writeup).
In retrospect, do you think that the policy actions were needed and of the right magnitude? Should policymakers have done some things differently?
ii) Point out how the stimulus payments affected disposable income. You can place notations on the chart or just write out a description in your text.

Categories
Macro & Micro economics

Would you label the market as an oligopoly or monopolistically competitive?

https://www.youtube.com/watch?v=ezbvELyYcA8&ab_channel=LandoSuccess Discuss the role of advertising in terms of product differentiation. How are the firms trying to differentiate their products? Do you think they were successful? Which ad do you think increased market power? Decreased it? Would you label the market as an oligopoly or monopolistically competitive?

Categories
Macro & Micro economics

Explain why one approach is better than the other.

Please answer the following questions in paragraph form:
1. Give an example of an externality cost and an externality that benefits people. Specifically, explain why externalities tend to cause additional pollution and environmental degradation and why externalities make environmental legislation necessary.
2. Use the concept of supply and demand to explain why an increase in Medicare subsidies can lead to an increase in health care spending by the government.
3. A government is thinking about increasing the sales tax rate. Should it use static or dynamic tax analysis? Explain why one approach is better than the other. Give one example of a tax rate plan that would be static and another than would be dynamic.
4. In the illegal drug market, dealers can sometimes dramatically decrease the purity of the product without seeing much of a decrease in sales. On the other hand, in restaurants, a small decrease in food quality can often mean death to the business. Explain why this is true in the context of elasticity.

Categories
Macro & Micro economics

Are they a “natural monopoly”?

Give an example of price discrimination. Which firm is taking part in it? What is the product/ service? Which type of price discrimination is it? Are you okay with this type of discrimination?
OR
Name and describe a firm or industry that has control of a key input and/or large fixed costs. Do they also have government protection? Why are they allowed to operate without much competition? Are they a “natural monopoly”?

Categories
Macro & Micro economics

Explain the extent wo which this statement is true and the extent to which it is false.

Please answer the following questions in paragraph form:
1. “Economists assume people are selfish.” Explain the extent wo which this statement is true and the extent to which it is false.
2. “Rational, self-interested people would never end up worse off by any decision they make. Obviously, people often make mistakes or have regrets. Therefore, people do not act rationally or out of self-interest.” Explain the extent wo which this statement is true and the extent to which it is false.
3. According to a survey, people want safer cars and say they are willing to pay substantially more for safer cars. Using this information, one car company adds safety features to its car, raising the price by several thousand dollars. What is the potential problem with this strategy?
4. Suppose that nuclear power plants are banned. Explain the opportunity costs of this decision? Also, what opportunities does this generate for other facets of the economy?

Categories
Macro & Micro economics

Should it use static or dynamic tax analysis?

Please answer the following questions in paragraph form:
1. Give an example of an externality cost and an externality that benefits people. Specifically, explain why externalities tend to cause additional pollution and environmental degradation and why externalities make environmental legislation necessary.
2. Use the concept of supply and demand to explain why an increase in Medicare subsidies can lead to an increase in health care spending by the government.
3. A government is thinking about increasing the sales tax rate. Should it use static or dynamic tax analysis? Explain why one approach is better than the other. Give one example of a tax rate plan that would be static and another than would be dynamic.
4. In the illegal drug market, dealers can sometimes dramatically decrease the purity of the product without seeing much of a decrease in sales. On the other hand, in restaurants, a small decrease in food quality can often mean death to the business. Explain why this is true in the context of elasticity.

Categories
Macro & Micro economics

Explain the opportunity costs of this decision?

Please answer the following questions in paragraph form:
1. “Economists assume people are selfish.” Explain the extent wo which this statement is true and the extent to which it is false.
2. “Rational, self-interested people would never end up worse off by any decision they make. Obviously, people often make mistakes or have regrets. Therefore, people do not act rationally or out of self-interest.” Explain the extent wo which this statement is true and the extent to which it is false.
3. According to a survey, people want safer cars and say they are willing to pay substantially more for safer cars. Using this information, one car company adds safety features to its car, raising the price by several thousand dollars. What is the potential problem with this strategy?
4. Suppose that nuclear power plants are banned. Explain the opportunity costs of this decision? Also, what opportunities does this generate for other facets of the economy?

Categories
Macro & Micro economics

Why are they allowed to operate without much competition?

Give an example of price discrimination. Which firm is taking part in it? What is the product/ service? Which type of price discrimination is it? Are you okay with this type of discrimination?
OR
Name and describe a firm or industry that has control of a key input and/or large fixed costs. Do they also have government protection? Why are they allowed to operate without much competition? Are they a “natural monopoly”?