02 Jun Question CON2-1 Explain shortcoming of markets. What are market
Question
CON2-1
Explain shortcoming of markets. What are market failures? What are major arguments between market enthusiasts and government interventionists?
Market failure is when a market doesn’t generate an efficient outcome.
CON2-2
1.How about changes in demand when there are changes in income for normal goods and inferior goods? How about changes in demand when there are changes in the price of a related good for subsitute goods and complementary goods?
2. Explain price controls. Compare price floors and price ceilings. What are major problems of price floors and price ceilings. Please explain price ceilings and price floors using market equilibrium price. Please show practical examples of the price floors and price ceilings
ASN2-1
1.(1 point)Suppose that in the British compound of a POW camp, the price of cheese is 6 cigarettes per cheese ration and price of coffee beans is 3 cigarettes per coffee ration. In the French compound, the price of coffee beans is 24 cigarettes per ration.
1)Is there an opportunity for beneficial exchange?
2)A British prisoner could exchange his cheese ration for ( )cigarettes, then exchange the extra cigarettes for ( ) coffee rations in the British compound.
3)If he travels to the French compound, he could exchange the extra coffee for ( ) cigarettes.
4)When he returns to the British compound, he can exchange the extra cigarettes for ( ) cheese rations. In other words, his net gain from trade is ( ) cheese rations.
2. (1 point) Assume that demand for a commodity is represented by the equation P=10-0.2Qd, and supply by the equation P=2+0.2Qs where Qd and Qs are quantity demanded and quantity supplied, respectively, and P=price. Using the equilibrium condition Qd=Qs, solve the equations to determine equilibrium price. Now determine equilibrium quantity(Dr.Shin)
Multiple Choice Questions
Ch3 Quiz
Macroeconomics: Prin., Apps, & Tools, 8e(O’Sullivan) TB2
Chapter 3 Exchange and Markets
1) The ability of one person or nation to produce a good at a lower opportunity cost than another is called a(n):
A) market advantage.
B) comparative advantage.
C) absolute advantage.
D) specialization advantage.
2) Suppose that in the time it takes for him to bake a cake, Bob can sew 5 pairs of jeans. In the time it takes for Joe to bake a cake, he can sew 8 pairs of jeans day. In this example, who has the comparative advantage in baking a cake?
A) Joe
B) both Bob and Joe
C) Bob
D) neither Bob nor Joe
3) An individual or country that has a comparative advantage in the production of one good:
A) must have an absolute advantage in the good’s production.
B) must not have an absolute advantage in the good’s production.
C) may or may not have an absolute advantage in the good’s production.
D) must not have an absolute advantage in the production of the other good.
4) A product produced in the home country and sold in another country is:
A) an export.
B) an import.
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