Source: Editorial Board, "How Much Will Americans Sacrifice for Good Health Care?" New York Times, February 16, 2019. a. Why might price regulations reduce the number of new drugs and medical devices that firms offer for sale? O A. By reducing firms' potential profits from selling new drugs and medical devices, price regulation may reduce the incentive firms have to devote resources to the research and development necessary to develop these OB. Firms decrease the number of new drugs and medical devices they offer for sale in order to spite the government for imposing regulations on them. O C. Price regulations reduce the demand for new drugs and medical devices, and therefore firms reduce the number they offer for sale. O D. All of the above. b. Suppose that you are the economic adviser to a presidential candidate who to prepare a report discussing the relevant factors the candidate should consider. Use the concepts of opportunity cost and trade-offs to discuss some of the main issues you would include in your report. trying to decide whether she should support a proposal that Congress impose such regulations on the prices of pharmaceuticals and medical The presidential candidate should consider

Source: Editorial Board, "How Much Will Americans Sacrifice for Good Health Care?" New York Times, February 16, 2019. a. Why might price regulations reduce the number of new drugs and medical devices that firms offer for sale? O A. By reducing firms' potential profits from selling new drugs and medical devices, price regulation may reduce the incentive firms have to devote resources to the research and development necessary to develop these OB. Firms decrease the number of new drugs and medical devices they offer for sale in order to spite the government for imposing regulations on them. O C. Price regulations reduce the demand for new drugs and medical devices, and therefore firms reduce the number they offer for sale. O D. All of the above. b. Suppose that you are the economic adviser to a presidential candidate who to prepare a report discussing the relevant factors the candidate should consider. Use the concepts of opportunity cost and trade-offs to discuss some of the main issues you would include in your report. trying to decide whether she should support a proposal that Congress impose such regulations on the prices of pharmaceuticals and medical The presidential candidate should consider

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 3SCQ: In an analysis of the market for paint, an economist discovers the facts listed below. State whether...

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1. Years ago, an apple producer argued that the United States should enact a tariff, or a tax, on imports of bananas. His reasoning was that “the enormous imports of cheap bananas into the United States tend to curtail the domes-tic consumption of fresh fruits produced in the United States.”. a. Was the apple producer assuming that apples and bananas are substitutes or complements? Briefly explain. b. If a tariff on bananas acts as an increase in the cost of supplying bananas in the United States, use two demand and supply graphs to show the effects of the apple producer’s proposal. One graph should show the effect on the banana market in the United States, and the other graph should show the effect on the apple market in the United States. Be sure to label the change in equilibrium price and quantity in each market and any shifts in the demand and supply curves.
Years ago, an apple producer argued that the United States should enact a tariff, or a tax, on imports of bananas. His reasoning was that “the enormous imports of cheap bananas into the United States tend to curtail the domes-tic consumption of fresh fruits produced in the United States.”. Was the apple producer assuming that apples and bananas are substitutes or complements? Briefly explain. If a tariff on bananas acts as an increase in the cost of supplying bananas in the United States, use two demand and supply graphs to show the effects of the apple producer’s proposal. One graph should show the effect on the banana market in the United States, and the other graph should show the effect on the apple market in the United States. Be sure to label the change in equilibrium price and quantity in each market and any shifts in the demand and supply curves.
The following graph shows the market for microwavable ramen noodles. Pramen O Price increase, quantity decreases O Price stays the same, quantity decreases Price increases, quantity changes ambiguously Supply Price increases, quantity stays the same Demand Initially, the market is in equilibrium. Then, the price of microwaves decreases. At the same time, the number of firms making ramen decreases. Which of the following is true about the new price and quantity after both shifts? Qramen
One article interviews a Turkish citizen, and finds that he was thinking of cancelling a trip abroad due to the rising cost. Using notation from class, how would this person calculate the price in Lira (L) of purchasing a meal in US, that has a price of 25 $. A) EL|$ *(25 $) B) E$|L*(25 $) Group of answer choices B A
1. Your econ professor would like to buy a Tesla X, but he cannot afford one. He __________ have a demand for a Tesla X. A. does B. does not 2. Which of the following would not change the supply of a good? A. A change in the price of the good. B. A change in the technology for producing the good. C. A change in the price of a resource required to produce the good. D. A change in the number of firms producing the good. E. A change in the government regulation of firms producing the good.
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Graphically show how each of the following shifts the supply curve. Also identify which factor of supply is being affected in each case. d) What happens to the supply of Spices if the US government withdraws an embargo on imported Spices from Iran? e) Wheat and Corn are substitutes in production. If the price of Corn increases, what happens to the supply of Wheat? f) What happens to the supply of Chocolates when the number of sellers decrease?
illustrates the market's demand and supply for cheddar cheese. Graph the data and find the equilibrium. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of thenewequilibrium, ineachofthefollowingsituations: a. The price of milk, a key input for cheese production,rises,sothatthesupplydecreasesby 80 pounds at every price. b. A new study says that eating cheese is good for your health, so that demand increases by 20% at every price.
Use a graph to show the impact on the price of Japanese cars sold in the United States if the United States imposes import quotas and other trade restrictions that decrease the supply of Japanese cars. Now, draw another graph to show how the change in the price of Japanese cars affects the price of American-made cars in the United States. Explain the market outcome in each graph and the link between the two graphs.
Suppose Meow Meow is a local store specializes in selling cat food. She offers discount coupons via Buzz, a free local newspaper. As such, some of her customers use the discount coupons while others do not. a. Printing and distributing the discount coupons are costly. Why does Meow Meow offer these coupons? Given that the coupons can be collected for free, why doesn’t she simply lower the price and save the costs of issuing the coupons? Briefly explain with reference to the concept of demand elasticity. b. Suppose Meow Meow has a constant marginal cost of $20 for her cat food. Based on your answer in (a), construct side-by-side diagrams to illustrate the pricing strategy adopted by Meow Meow on the coupon users and nonusers. Label your diagrams clearly. c. Explain TWO practical limitations facing Meow Meow when conducting the above pricing strategy. d. Instead of the above pricing strategy, one economist suggests Meow Meow using a two-part tariff. Briefly illustrate how this works.
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