Politicians are often heard saying that tuition at state
universities should be kept low “to make education equally accessible to
all residents of the state, regardless of income.”
Assuming that state funding for the universities
is held constant, describe the conditions that will prevail if tuition is held
below equilibrium price. Provide one (1) example to support your response.
Will education really be “equally
accessible” under these conditions? Provide one (1) example to support
Using the Internet, research the influenza vaccine, or
“flu shot.” Use the following to guide your research:
Think about the flu shot in the context of a
What are the economic benefits of the flu shot?
In what ways has the government become involved
in the distribution of flu shots? For what reasons?
Describe one (1) reason why the private market
for flu vaccinations would produce an inefficient outcome.
Describe one (1) way that government involvement
could achieve an efficient quantity of vaccinations.
Provide one (1) original example for each of the
a private good
a public good
Imagine that it is the year 2199. Technology has progressed
at an incredible pace. The latest discovery is the plutonium engine, which is
capable of converting plutonium, a by-product of nuclear fission, into fuel to
power the nuclear reactors in our new form of transportation, the rocket-car.
However, because the firm that invented the engine, the Futures Unlimited
Corporation, already has a government license to control and distribute the
quantity of this certain isotope of plutonium on the market, it is now
conceivably in charge of a monopoly on plutonium-fueled transportation.
Describe the economic outcome of this
single-price monopoly in terms of profit. Provide one (1) supporting fact to
support your response.
Describe one (1) way that the Futures Unlimited
Corporation makes output and price decisions.
Would consumers benefit more from a tariff or a
quota on imports? Provide one (1) supporting fact to support your response.
Consider the following weekly production
possibilities of gloves and hats in Panama and Russia:
What is each country’s opportunity cost of
producing gloves and hats?
If the countries could, should they trade?
Provide one (1) supporting fact to support your position.