Introduction | Practice Problems, Examples & Solutions

Ten Principles of Economics

Economics

Precision agriculture will become commonplace on farms. It will include the use of self-driving machinery and flying robots to automatically survey and treat crops.
a. Assume that using self-driving machinery for agriculture requires fewer farmers and less time. Is using self-driving machinery technologically efficient?
b. What additional information would you need to be able to say that switching to self-driving machinery is economically efficient for agriculture?

Organizing Production

01:23

Economics

Stocks too volatile? Bonds too boring? Then try an alternative investment- one you can wear on your wrist..... [The] typical return on a watch over five to ten years is roughly 1096 . [One could $]$ do better in an index fund, but $\ldots .$ what other investment is so wearable?
a. What is the cost of buying a watch?
b. What is the opportunity cost of owning a watch?
c. Does owning a watch create an economic profit opportunity?

Organizing Production

03:11

Economics

Calculate Lee's opportunity cost of production and his economic profit.

Organizing Production

Thinking Like an Economist

147 Practice Problems

04:25

Economics

A city has built a new high-rise car park. There is always an available parking spot, but it costs $€ 1$ a day. Before the new high-rise car park was built, it usually took 15 minutes of cruising to find a parking space. Compare the opportunity cost of parking in the new car park with the old parking system. Which is less costly and by how much?

What is Economics?

01:32

Economics

Two leading design firms, Astro Studios of San Francisco and Hers Experimental Design Laboratory, Inc, of Osaka, Japan, worked with Microsoft to design the Xbox 360 video game console. IBM, ATI, and Sis designed the Xbox 360 's hardware. Three firms Flextronics, Wistron, and Celestica- manufactured the Xbox 360 at their plants in China and Taiwan.
Describe the roles of market coordination and coordination by firms in the design, manufacture, and marketing of the Xbox 360.

Organizing Production

01:07

Economics

Use the following data to work Problems 12 to 15 Natalia has a budget of $\$ 24$ a month to spend on fruit juice and books. The price of fruit juice is $\$ 3$ a bottle, and the price of a book is $\$ 6$
Draw a graph of Natalia's budget line with the quantity of books on the $x$ -axis. What is the slope of Natalia's budget line? What determines its value?

Possibilities, Preferences, and Choices

Interdependence and the Gains from Trade

26 Practice Problems

01:04

Microeconomics

The estimated demand function (Moschini and Meilke, 1992 , for Canadian processed pork is $Q=161-20 p+20 p_{b}+3 p_{\mathrm{c}}+2 Y,$ where $Q$ is the quantity in million kilograms (kg) of pork per year, $p$ is the dollar price per kg (all prices cited are in Canadian dollars), $p_{b}$ is the price of beef per $\mathrm{kg}, p_{c}$ is the price of chicken in dollars per $\mathrm{kg},$ and $Y$ is average income in thousands of dollars. What is the demand function if we hold $p_{b}, p_{c},$ and $Y$ at their typical values during the period studied: $p_{b}=3.2, p_{c}=3 \frac{3}{10},$ and $Y=13 ? \mathbf{A}$

Supply and Demand

Demand

02:01

International Economics: Theory and Policy

Many countries have value-added taxes-taxes that are paid by producers, but are intended to fall on consumers. (They're basically just an indirect way of imposing sales taxes.) Such value-added taxes are always accompanied by an equal tax on imports; such import taxes are considered legal because like the value-added tax, they're really an indirect way of taxing all consumer purchases at the same rate. Compare this situation to the argument over carbon tariffs. Why might defenders argue that such tariffs are legal? What objections can you think of?

Controversies in Trade Policy

02:49

International Economics: Theory and Policy

What are the disadvantages of engaging in strategic trade policy even in cases in which it can be shown to yield an increase in a country's welfare?

Controversies in Trade Policy