Essay about Econ 545 Week 2 Assignment

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1. NORMATIVE ECONOMICS—REPUBLICANS VERSUS DEMOCRATS Visit both the Republicans’ and the Democrats’ Web sites. Both parties address Healthcare and both address Energy policy, for example. (Democrats under “Issues”, Republicans under “Our Party”.) Compare and contrast their views on two such issues. Generally speaking, how much of the disagreement is based on normative economics compared to positive economics? Give an example of loaded terminology from each site. Answer: The republican energy policy focuses on less regulation and puts the responsibility of energy independence on American business. The belief is corporations will spend more on drilling, alternate fuels and research and development and do…show more content…
Why? Will production using that technique entail profit or loss? What will be the amount of that profit or loss? Will the industry expand or contract? When will that expansion or contraction end? Answer. The firm will choose technique 2 because it has the lowest labor cost and the overall lowest cost. b) Assume now that a new technique, technique 4, is developed. It combines 2 units of labor, 2 of land, 6 of capital, and 3 of entrepreneurial ability. In view of the resource prices in the table, will the firm adopt the new technique? Explain your answer. Answer. The firm will adopt the new technique because the total cost drops to $32. c) Suppose that an increase in the labor supply causes the price of labor to fall to $1.50 per unit, all other resource prices remaining unchanged. Which technique will the producer now choose? Explain. I need assistance with this question. d) “The market system causes the economy to conserve most in the use of resources that are particularly scarce in supply. Resources that are scarcest relative to the demand for them have the highest prices. As a result, producers use these resources as sparingly as is possible.” Evaluate this statement. Does your answer to part c, above, bear out this contention? Explain. I need assistance with this question. Answer: | | Resource Units Required | Resource | Price per Unit of

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