Economics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280595
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Question
Chapter 14, Problem 3DQ
(a)
To determine
Government regulation on quantities of output.
(b)
To determine
The impact of rationing commodities.
(c)
To determine
Allocating different jobs for soldiers.
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Give examples and definitions of how these economic terms are used: (Simple definitions)
-factory market
-opportunity cost
-wealth
-wants
-needs
-production possibilities graph
-scarcity
(a) Assume that the markets for sugar cane, rum, and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes for consumption.
(i) Discuss the impact of the good harvest on each of the three markets.
(ii) Discuss the effect on the markets for each of the three products if the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers, and whiskey producers?
(b) Identify a newspaper article that illustrates a market failure in your assigned Caribbean country. Ensure that you provide a screenshot of the article in your submission. NOTE: Only the following market failures should be examined: public good, asymmetric information, positive or negative…
USE FIGURE #1:
In an effort to protect endangered species from the effects of logging in America's national forests, the federal government passes a law prohibiting logging in most of the state of Washington. Which of the figures above best illustrates the effect of this new law?
Group of answer choices
- Figure C
- Figure B
- None of these because a prohibition cannot be illustrated using demand and supply figures
- Figure A
- Figure D
Chapter 14 Solutions
Economics: Principles and Policy (MindTap Course List)
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