Economics For Today
Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
Question
Chapter 13, Problem 12SQ
To determine

The cause of the establishment of ICC.

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Explain in brief. a) Why government should intervention in a monopoly market. b) Give a practical example of government intervention in the monopoly market.
1. The problem with regulating a natural monopoly at marginal cost pricing is that regulations are generally impossible to enforce. the cost of regulation outweighs any potential benefits. regulating a market causes more deadweight loss. the monopolist firm will lose money and want to shut down.   2. Suppose an oil refinery produces air pollution that negatively affects the surrounding residents. Which of the following is not a policy the government could take to correct this externality? -Subsidize the refinery’s product. -Require the refinery to pay for and install scrubbers so that no pollution is released. -Estimate the damages caused by the pollution and force the refinery to pay that amount. -Enact an excise tax on the refinery’s product.
Andrew Carnegie's monopoly in steel was never as complete as John D. Rockefeller's monopoly in oil. But even after the breakup of Standard Oil in 1914, monopolies kept developing -- including more "natural" monopolies such as Microsoft and Facebook. Why does the government of the USA continue to attempt to break up monopolies? What is the economic rationale?    A. Monpolies are inherently anti-consumer.   B. Monpolies are a natural consequence of technoogical innovation, and are seen by some economists as evidence of the superiority of capitalism because the market rewards competition.   C. Monopolies are problematic because of price-fixing, which is achieved mainly after they become established, not because of the aggressive competition required to out-compete rivals before market dominance is achieved.   D. All the above.
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  • Fill in the table and use your answers to the questions to figure out which market type each business fits into. Below you are given potential answers to questions 3 through 9 on each table and one example table.  Please fill in the whole table. 1. Business  Verizon 2. Industry   3. Size of Market   4. Number of Buyers   5. Number of Sellers   6. Product Type   7. Barriers to Entry   8. If high, why?   9. Market Type
    1. From an economic view, should natural gas industry be 100% deregulated, why or why not? 2. how do you think climate change activists have impacted the demands for natural gases? 3. recall at least three fixed and two variable costs of women's clothing manufacturing industry.
    Suppose that only one firm, Big Foot, sells footballs in the country and international trade of footballs including both exporting and importing is prohibited by government due to Big Foot’s successful lobby. The following equations indicates Big Foot’s market demand and total cost:• Demand: P = 5-0.5Q• Total Cost: TC = 1.5 + 0.5Q + 0.25 Q2where Q is quantity (in 1000) and P is the price measured in dollars. (i) Determine how many footballs Big Foot chooses to produce, the price it will set for its product and its expected profit. Illustrate your analysis with a propermarket diagram.(ii) Evaluate the size of deadweight loss cause by monopoly status of Big Foot. Suppose that the parliament passed a new law that not only allows everyone to sell footballs but also opens international trade of footballs. Suppose further that the market demand in the country remains the same while the price of football in the competitive global market is $3 including shipping and importation fee. Analyse…
  • Fill in the table and use your answers to the questions to figure out which market type each business fits into. Below you are given potential answers to questions 3 through 9 on each table and one example table. Please fill the whole table. 1. Business  Thomas Law Offices 2. Industry   3. Size of Market   4. Number of Buyers   5. Number of Sellers   6. Product Type   7. Barriers to Entry   8. If high, why?   9. Market Type
    Question #10: What is an economic regulation? (Read Chapter 4, 27 and 28), or MindTap Microeconomics 9e (Ch 4, ch. 13, and ch.14) -Boyes W. and Melvin M. (2014), Economics (Full), 10th Edition, South-Western, Cengage Learning. OR -MindTap for Boyes’ Microeconomics 9e. one-page explanation.
    1.Some monopolies are regulated by setting a price that a monopolist cannot exceed over a specified period of time. This is called:  A)price cap regulation B)regulatory capture C)antitrust laws D) cost-plus regulation   2.Let's say that the equilibrium salary for professors is $70,000/year. If universities pay an average of $90,000/year, we can expect a ___________ of professors.  A)shortage B)surplus C)monopoly D)union   3.If college education becomes a requirement for working in a fast-food establishment, we may experience a _____________ in the supply of potential fast-food workers. A)increase B)rightward shift C)decrease D)surge   4.Minimum wage laws are examples of price floors, where an employer is:  A)Not allowed to pay wages higher that what is set by the law B)Should pay all workers the minimum wage set by the law C)Not allowed to pay wages lower than what is set by the law D)Not allowed to hire people who asks for wages higher than what is set by the…
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