Category Archives: Economics

Calculate the PEDs for the Burbank–Oakland and Kansas City–St Louis routes.

Southwest Airlines is a major carrier based in Texas, and has made a strategy of cutting fares drastically on certain routes with large effects on air traffic in those markets. For example on the Burbank–Oakland route the entry of Southwest into the market caused average fares to fall by 48 per cent and increased market revenue from $21,327,008 to $47,064,782 annually. On the Kansas City–St Louis route, however, the average fare cut in the market when Southwest entered was 70 per cent and market revenue fell from an annual $66,201,553 to $33,101,514.

Questions 1 Calculate the PEDs for the Burbank–Oakland and Kansas City–St Louis routes. 2 Explain why the above market elasticities might not apply specifically to Southwest. 3 If Southwest does experience a highly elastic

Please show two graphs that represent relationships between Y and X, one that has uncertainty or forecast error and one that does not

Please briefly respond to all of the following questions on each page. There are 3 pages of questions. This exam is a “take-home, open book” exam and posted no later than 8 AM and due back to me by 11:59 PM today. You can use whatever sources that you want to learn more about the material but the exam responses must be in your own words and all calculations your own. You may not work with anyone. All paraphrases, quotes, graphs, …, that are not developed by you must be cited with a source. Please keep to a severe minimum as this is a test of your learning. Please respond to the exam in WORD and do not convert to a pdf file so that I can make….

analyze marks tax losses.

Mr Mark Lewis is employed on a luxury cruise liner which travels the Mediterranean Sea. After deductions his taxable income is AUD$150,000, (Hong Kong Dollar 790,000)

 

He owns a farmhouse in Australia which was his family home. After divorcing his wife, the wife took their twins to live in Canada. Mark now rents the farmhouse to a lovely couple who sublease parts of the house through Airbnb.

 

The farmhouse is rented including all furniture, with the furniture belonging to Mark. Mark stays on the property when he is in Australia in a converted shed consisting of a master suite, bathroom and toilet. This part of the property is not listed on the lease agreement. All of Mark’s personal belongings are locked up and stored in this….

What are equilibrium price and quantity?

1. Suppose the demand and supply functions for good X are Qd=50 -8P & Qs= -17.5 + 10P

(a) What are equilibrium price and quantity?

(b) What is the market outcome if price is $2.75? What would you expect to happen? Why?

(c) What is the market outcome if price is $4.25? What would you expect to happen? Why?

(d) What happens to equilibrium price and quantity if the demand function becomes Qd=59-8P?

(e) What happens to equilibrium price and quantity if the supply function becomes Qs=-40+10P (demand functions is Qd=50-8P)?

(f) Suppose that the demand and supply functions for good X are Qd = 56 – 2PX…

Prepare between 3 to 5 pages (exclude the cover and reference pages) document of your responses and findings based on the given question.

Prepare between 3 to 5 pages (exclude the cover and reference pages) document of your responses and findings based on the given question.

LUCRATIVE INVESTOR-STATE DISPUTE SETTLEMENT (ISDS) LAWSUITS

In recent months, international law firms have been encouraging ISDS lawsuits citing government measures to check contagion and mitigate their economic consequences, urging clients to invoke investment and trade agreements to claim for allegedly lost income or additional losses or costs due to new government policy measures.

Another firm Ropes & Gray advises: “Governments have responded to COVID-19 with a panoply of measures, including…limitations on business operations, and tax benefits. Notwithstanding their legitimacy, these measures can negatively impact businesses by reducing profitability, delaying operations, or being excluded from government benefits…For companies with foreign investments, investment agreements could be a powerful tool….

What is the change in equilibrium expenditure?

In the economy of Cambodia, the marginal propensity to consume is 0.9. Investment is $50 billion, government purchases of goods and services are $40 billion, and lump-sum taxes are $40 billion. Cambodia has no exports and no imports. a. The government cuts its purchases of goods and services to $30 billion. What is the change in equilibrium expenditure? b. What is the value of the government purchases multiplier? c. The government continues to purchase $40 billion worth of goods and services and cuts lumpsum taxes to $30 billion. What is the change in equilibrium expenditure? d. What is the value of tax multiplier? e. The government simultaneously cuts both its purchases of goods and services and taxes to $30 billion. What is the change in equilibrium expenditure? Why….

Explain whether elasticity has changed. If so, how has price and income elasticity changed?

The Federal government has introduced JobKeeper payments to tackle the rising unemployment due to COVID-19. Loss of employment has meant a loss of income; this means we are experiencing a decrease in individual demand by households. With affordability now low, income elasticity of demand has been impacted. This paper requires you to use microeconomic analysis to assess how individual demand can be improved.

Question 1: 1. Is JobKeeper effective in retaining casual employment? How is it impacting individual demand? Do individuals have enough purchasing power to continue buying goods as normal? Explain whether elasticity has changed. If so, how has price and income elasticity changed? Provide evidence and use supply and demand diagrams to support your answer.

Question 2: 2. Is this change in demand having an impact on….

what is the larger debate that is being addressed by this book?

The Critical Review Paper will be on William Easterly’s book The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor.

Length: 8-10 pages

Contents: the book review MUST HAVE 3 PARTS:

Part 1: Summary of the research question and of the argument, and theoretical framework of the book Part 2: Internal critical evaluation of the book: • type of evidence used, quality of the evidence • case selection • how well does the evidence support the argument? • strengths of the book and glaring weaknesses, how to improve it Part 3: A discussion of the contribution of the book to the larger debates on Globalization (citing some of the readings of the class): • what is the larger debate that is being addressed by this….

Explain why development of a profit-maximizing model here requires 0 < g < 1. b.

The Acme Heavy Equipment School teaches students how to drive construction machinery. The number of students that the school can educate per week is given by q ¼ 10 min(k, l) r , where k is the number of backhoes the firm rents per week, l is the number of instructors hired each week, and g is a parameter indicating the returns to scale in this production function. a. Explain why development of a profit-maximizing model here requires 0 < g < 1. b. Supposing g ¼ 0.5, calculate the firm’s total cost function and profit function. c. If v ¼ 1000, w ¼ 500, and P ¼ 600, how many students will Acme serve and what are its profits? d. If the price students are willing to….

Describe either an adverse selection or moral hazard problem a company is facing.

Describe either an adverse selection or moral hazard problem a company is facing.Describe the qualities that make it either adverse selection or moral hazard. What is the source of the asymmetric information? Who is the less-informed party? Are there any wealth-creating transactions not consummated as a result of the asymmetric information? If so, could you consummate them? What advice/recommendations would you give the company?Incorporate concepts from the readings and lectures.