Economics Answers

Dollar sales were down 3% for the 52 weeks ending March 26 with $1.4 billion. Pounds were down 5% with 1 billion pounds sold. Price per pound was up 3% to $1.36. Assuming a change in only one of supply or demand, what is happening in the market?

Suppose a price-discriminating hotel faces two types of consumers: high and low. Suppose 50% of consumers are of each type.
Each consumer wants at most one hotel room. A room can come in three qualities: Royal, Aristocratic, and Working
Class. The consumers' dollar valuations for each kind of room are given below:
Type # Quality Royal Aristocratic Working
High $2000 $1000 $500
Low $500 $400 $300
Suppose the hotel wishes to maximize total revenues (i.e., marginal production costs are zero). In addition, suppose
the hotel cannot distinguish one type of consumer from the other, and therefore consumers must self-select into
the option intended for each one. (Note: the hotel is not forced to sell a room to every consumer). Which room and price is offered to each type of consumer?

The Z – score model uses 5 variable illustrate the model giving the
reasons for the choice of the variable used.

1. A wage subsidy has been proposed as the best way to increase the income of the working poor. The subsidy would involve government topping up the hourly wage rate of the individual who has been designated “working poor”. Discuss the possible income and substitution effects associated with a wage subsidy.

1) One of the most striking changes in the personal distribution of income has been the widening gap in the earnings between skilled and unskilled workers. Discuss some of the factors that could explain the growing inequality between these two groups.
2) How would each of the following affect Helena’s labour supply decision? Be specific on what happens to her individual labour supply curve.
a) The value of Helena’s home triples in an unexpected hot real estate market.
b) Originally an unskilled worker, Helena acquires skills that give her access to a higher-paying job.
c) A temporary income tax surcharge raises the percentage of her income that she must pay in taxes.

3. a. Using isoquants and isocost lines, show why a lower level of output in the short-run will always cost more than in the long run. Be sure to explain your graph.

b. Provide a short explanation (in words only) why this true. Be sure to reference the difference between production decisions in the short run and long run.

1. Assume that the unemployment rates for three consecutive years are 7.5%, 8.6%, and 9.5%. Suppose that the employment/ population ratios for the same three years are 56.7%, 57.5%, and 58.3%. Judging by the two measures of labour utilization, is the economy gaining or losing strength?
2. What type of unemployment are the following workers experiencing? Explain.
a) Workers in a fish plant in Newfoundland and Labrador lose their jobs when the cod fishery closes down.
b) Ski lift attendants in British Columbia are laid off due to the lack of snow.
c) A salesclerk in a video store loses her job when a new video store opens around the corner.
d) Bank tellers lose their jobs as bank installed automated teller machines.
e) Lack of consumer confidence and growing pessimism among Canadian business leaders lead to wide-scale layoffs in the natural resources and manufacturing industries.

discuss whether prices are less important in allocating scarce resources in a mixed economy compared with a market economy

The publishing company ReadIt publishes its magazine Survive Economics on the internet. In order to access it, readers have to purchase an annual subscription that is currently priced at P1 = 100 EUR. At this price, the company recorded Q1 = 600 subscriptions. The cost of providing the magazine online is independent of the number of subscriptions. . Recently, an analysis of the demand for Survive Economics lead to the trustworthy information that demand is linear and that the firm sells Q2 = 800 subscriptions if it sets the price at P2 = 50 EUR and that it sells Q3 = 200 subscriptions if it charges P3 = 200 EUR. The management knows that there is an ambiguous effect on subscription revenue if it increases or decreases the subscription price that is somehow related to the economic concept of a price elasticity of demand. In order to figure out up to what level it should increase or decrease its price or even leave it unchanged, it decided to employ the management consultancy Clever&Smart.

will aggregate output rise or fall if an increase in autonomous consumption, expenditure is matched by an equal increase in taxes?