What is a pooling equilibrium? A separating equilibrium? A semi-separating equilibrium? How are beliefs updated in each of the different equilibrium types?
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- 18. Why could experiments be used to solve the endogeneity problem? [answer in no more than 50 words]2- Explain the potential source of inefficiencies in the market equilibrium. In other words, when does the market equilibrium in the matching model not coincide with the first-best? Potential market inefficiencies are often a call for public policy. What policies could bring the equilibrium allocation closer to its optimal one?Which of these situations describe an equilibrium, and which does not? If not, what would an equilibrium look like? Remember that the definition of equilibrium means, in part, that there is no incentive or push/pull to change from the current described state. Many people regularly commute from the suburbs to the downtown area of a local city. Due to traffic congestion, the trip takes 30 minutes when you travel by highway, and15 when you go by side streets. There are 2 gas stations at the intersection of Main and Vine. One charges $3.75 for regular and the other charges $3.25. Customers can get gas immediately at the first station, but must wait in long lines at the second. Every student who enrolls in econ principles must also attend a weekly tutorial. This semester, 2 sections are offered, which meet at the same time, in adjoining classrooms and are taught by equally competent and liked instructors. Section A is overcrowded with people sitting on the floor and unable to see the board…
- (b) Discuss the distinction and similarities between partial and general equilibrium analysis.Define the Fisher effect. To what extent do empirical tests confirm that the Fisher effect exists in practice?In Problem 25, under what conditions is a pooling equilibrium possible? Problem 25 Education is a continuous variable, where is the years of schooling of a high-ability worker and is the years of schooling of a lower-ability worker. The cost per period of education for these types of workers is respectively, where The wages they receive if employers can tell them apart are And Under what conditions is a separating equilibrium possible? How much education will each type of worker get?
- If f(k) = 6k0.5, s = 0.1, n = 0.1, and d = 0.2, what is the value of f(k) at equilibrium? A. 6 B. 12 C. 18 D. 24Differentiate between an exogenous variable and an endogenous variable in an economic model? Why isn’t it useful to construct an economic model that contains only exogenous variables (and no endogenous variables)?The figure below shows multiple equilibria. Which of the following would be true for possible equilibrium points on the figure? E₁ exp Ez E3 OA) Point E₁ is the only possible equilibrium. OB) Points E1 and E3 are only possible equilibria. ●g Point E3 is the only possible equilibrium. OD) Point E₂ is the only possible equilibrium. OE) Points E1 and E2 and E3 are all possible equilibri
- What is a willingness to pay? How does this relate to the concept of demand? When determining the cost of manufacturing a product, what considerations are included in the cost? Provide an example of a product and explain each consideration in relation to your example. When purchasing construction materials for a home renovation, what factors should a homeowner consider? Provide an example of a green building product—a sustainable alternative construction material—and explain each factor in relation to your example. Address how the choice of using this particular green building product might influence and be influenced by supply and demand. What assumptions do economists make? Why does each assumption matter in environmental economics? Is the environment an economic asset? Is the environment a social asset? How does global demand for fish affect marine natural resource economics? How is the supply of forest goods influenced by privately and publicly owned forests? Why has supply and…a) i)Explain difference between; ii,Microeconomics and macroeconomics iiiPositive and Normative economics b) Given the following demand and supply functions as; i)Find the price elasticity of demand and price elasticity of supply at the equilibrium point. ii)Based on the values obtained from Price elasticity of supply in (i) above, what advice would you give to the producer if he is to increase revenue? iv)Using illustrations, distinguish between Minimum and maximum price v)Assuming the government, set the price at 45shs, determine whether its minimum or maximum price, and state the surplus or deficit4) Consider a pure exchange economy with two goods, (x, y), and two consumers, (1, 2). Consumers' endowments are e1 = (4, 2) and e? = (6, 6) And their preferences are represented by utility functions: u(x, y) = x³y and u(x,y) = x³y$ (d) Set up the utility maximization problem for each consumer and solve for their Marshallian demand functions. (e) Compute the market demand for each good. () State the Walrus law for this economy and explain its economic interpretation. (g) Assume the excess demand for good x is zero, i.e., EDx = 0, and calculate the ratio of prices, i.e., p Ipy . Then, use this ratio of prices to show that the excess demand for good Yis also zero, i.e., EDy= 0. Briefly explain how this relates to the Walrus' law. (h) Given the price ratio found above, calculate the equilibrium allocations and show that feasibility, individual rationality, and Pareto efficiency holds.