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What is Market Distortion and its potential long-term effect? Please explain thank you.
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- What is advantage and disadvantage of economic prices for non tradable good in distorted marketsWhat are the possible reasons why the government may make a market intervention? What are the possible implications of such interventions? How might the wedge between consumers and firms lead to market distortions?Recognize how changes in supply and demand affect market outcomes and explain the effect of government regulation on prices?
- What is the difference between the primary market and thesecondary market?Suppose the market for hamburgers is unregulated. That is, hamburger prices are free to adjust based on the forces of supply and demand. If a shortage exists in the hamburger market, then the current price must be ________ than the equilibrium price. For the market to reach equilibrium, you would expect ___________ .How do technologies affect changes in both supply and demand? Cite an example. Do you agree that government intervention in the market can overcome market failure? Explain your answer and cite examples. PRICE ELASTICITY: Given the quantity demanded and price for chicken, compute and determine if the elasticity of the commodity and the decision of the firm. POINT PRICE QUANTITY DEMANDED FOR CHICKEN A 100 10 B 90 20 INCOME ELASTICITY: Given the quantity demanded and price for chicken, compute and determine if the elasticity of the commodity and the decision of the firm. POINT INCOME QUANTITY DEMANDED FOR CHICKEN IN KILO A 20,000 8 B 25,000 10 CROSS ELASTICITY: Given the quantity demanded and prices for commodities below, compute and determine if the goods are either substitutes or complements. GOOD QD1 QD2 P1 P2 COFFEE 4 7 8 6 TEA 5 3 7 9 GOOD QD1 QD2 P1 P2 JUICE 8 9 10 11 SOFTDRINK 6 7 9 12
- discuss two methods that the government may use to intervene in the market to eliminate the market inefficiency. In your discussion, explain which method is prefferedA6 A functioning market exists when there is more than one firm on either the buying side of the selling side of the market for a particular product.Differentiate between demand-side market failures and supply-side market failures.
- Assume that the government of the state of New Jersey has determined that a large number of injuries and deaths have occurred as a result of accidents involving the installation and repairs of electrical equipment at private residences. In reaction to this problem the state assembly decides to pass a law which requires that all certified electricians pass a tougher state licensing examination. Analyze the impact that this law is likely to have on the market for electricians and explain why safety may not necessarily improve. If the market price of the good or service that a firm produces increases, what happen to the demand of labor? Explain. Several cities across the United States have passed legislation to raise the living wage. How would this policy affect firms? Make an argument for or against living wages in your city. Be sure to cite your references. (Note: the living wage calculator is a useful tool to determine the cost of living where you live).What is the market structure in retail gasoline?Use the graph to answer the question that follows. Without government intervention, this market will charge a price lower than optimal by Pc higher than optimal by Pc lower than optimal by Pc − Pe higher than optimal by Pc − Pe lower than optimal by Pc − Pp