Economics Homework Thirteen Answers - Student Two

TrishaM

1\.

OK.

2\. This is the result of free trade. Free traders support foreign workers who work for the United States, while protectionists are opposed to it. Thus, the free traders caused the problem not the protectionists.

Good, but your statement that "Free traders support foreign workers who work for the United States" seems a little off. Perhaps you mean "... foreign workers who work for United States companies." "Working for the United States" itself would mean working for our federal government, and very few foreign workers do that. But perhaps federal government jobs will be "offshored" (sent to workers in foreign countries)!

3\. One of the primary responsibilities of the Federal Reserve is to prevent the system of banks around the country from collapsing.

Good.

4\. The good must be price inelastic.

Correct. Be sure understand why: because inelastic demand means the demand does not change much when price increases, and thus the revenue (PxQ) goes up for the firm.

5\. A monopolistic competitive firm has the characteristic "P > MC" that is lacking in a perfectly competitive firm. The reason for this is that a monopolistic competitive firm does not have to continuously lower its prices to beat its competitor. This means that the monopolistic competitive firm can raise its prices to a certain extent and still have many customers, thus, its Price will exceed its Marginal Cost. In a perfectly competitive firm, however, this does not happen.

Excellent!

6.In the short run, if you didn't have any option but to buy the tickets the day before your flight, it will probably be more expensive than if you had planned the trip ahead of time and had the option to watch for a cheaper ticket price.

Good, might explain a bit more why the prices are usually higher the closer it is to the flight. See model answers when available. Full credit.

7\.

OK.

Perfect final homework! Congratulations on staying with this course to the end and completing all the homework. You've already done better than a few others who could not keep with it on this site. Just one more step ... the final exam. If you focus on Lecture #14, the review items in the other recent lectures, and fully understand everything on the midterm, then you'll do great on the final exam and even the CLEP!--Andy Schlafly 19:12, 19 December 2009 (EST)