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Hello! I'm a sophomore at the University of Michigan Ross School of Business who enjoys teaching and helping others! My specialty for teaching is economics on Numerade, but outside of Numerade I enjoy mentoring and tutoring other students! I hope you enjoy the video solutions I've made on the economics problems!
Suppose the book-printing industry is competitive and begins in a long-run equilibrium.a. Draw a diagram showing the average total cost, marginal cost, marginal revenue, and supplycurve of the typical firm in the industry.b. Hi-Tech Printing Company invents a new process that sharply reduces the cost of printing books.What happens to Hi-Tech's profits and to the price of books in the short run when Hi-Tech'spatent prevents other firms from using the new technology?c. What happens in the long run when the patent expires and other firms are free to use thetechnology?
Why is economic growth important? Why could the difference between a 2.5 percent and a 3 percent annual growth rate be of great significance over several decades? LO1
KEY QUESTION To what extent have increases in U.S. real GDP resulted from more labor inputs? From higher labor productivity? Rearrange the following contributors to the growth of productivity in order of their quantitative importance: economies of scale, quantity of capital, improved resource allocation, education and training, technological advance. LO2
Using Figure $5,$ calculate the price elasticity of demand when gasoline rises from $\$ 2$ per gallon to $\$ 3$ per gallon over:a. the short run.b. the long run.
Table 2 shows a short-run elasticity of demand for cigarettes. The same study suggested that the long-run elasticity of demand for cigarettes ranges from 1.0 to $2.5 .$ Which is larger-short-run or long-run elasticity? Is this what we would expect? What adjustments might smokers be able to make in the long run that they cannot make in the short run that can explain the difference between short-run and long-run elasticities?
Some studies suggest that "tooth extraction" is an inferior good. Which measure of elasticity (price elasticity of demand, price elasticity of supply, income elasticity, or cross-price elasticity) would provide evidence to support this claim? What would we look for in this elasticity measure to determine if tooth extraction were inferior?
