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Economics of Enterprise
Consider two firms, A and B that produce super computers. Each can produce the next generation super computer
for math (M) or for chip research (C). However, only one can successfully produce for both markets
simultaneously. Also, if one produces one type, the other might not be able to successfully produce the same type,
because of the limited market. The following payoff matrix illustrates the problem.
Scenario AA
Firm B
M C
Firm A M 2, 1 2, 2
C 1, 1 3, 2
Does a Nash equilibrium exist? (Answer yes or No). If a nash equilibrium exists, give the payoffs
for math (M) or for chip research (C). However, only one can successfully produce for both markets
simultaneously. Also, if one produces one type, the other might not be able to successfully produce the same type,
because of the limited market. The following payoff matrix illustrates the problem.
Scenario AA
Firm B
M C
Firm A M 2, 1 2, 2
C 1, 1 3, 2
Does a Nash equilibrium exist? (Answer yes or No). If a nash equilibrium exists, give the payoffs
Economics of Enterprise
What are the advantages and disadvantages of communism?
Economics of Enterprise
What accelerated the move toward capitalism in Mexico?
Economics of Enterprise
What are the advantages and disadvantages of capitalism?
Economics of Enterprise
What are capital goods?
Economics of Enterprise
In a market economy, what does a high price signal?
Economics of Enterprise
What effects do tax reductions have on supply side economics?
Economics of Enterprise
The two general types of economic systems that exist today are what?
Economics of Enterprise
1. & Over the past decade, the demand for CDs has dramatically increased. What are some of the causes of this increase in demand? According to supply-and-demand theory, price should rise when demand increases. However, in recent years the average price of a CD has actually fallen. Explain this apparent contradiction between the and fact.
2. How would each of the following cases affect the market for blue jeans in the united states? Illustrate each answer with a supply and demand diagram.
I. The price of denim cloth increases.
II. A large number of immigrants arrive in united states.
III. A depression in united state causes household incomes to fall.
3. Government imposed per unit sales tax on beer sales in order to control the consumption of beer (in terms of quantity) among youngsters . with the aid of a suitable diagram evaluate the success of the above policy if demand for beer among youngsters is price inelastic.
2. How would each of the following cases affect the market for blue jeans in the united states? Illustrate each answer with a supply and demand diagram.
I. The price of denim cloth increases.
II. A large number of immigrants arrive in united states.
III. A depression in united state causes household incomes to fall.
3. Government imposed per unit sales tax on beer sales in order to control the consumption of beer (in terms of quantity) among youngsters . with the aid of a suitable diagram evaluate the success of the above policy if demand for beer among youngsters is price inelastic.
Economics of Enterprise
Explain at least four of the main problems involved in using national income measurement tools to determine living standards of a country and to compare countries?
