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Eco Three Questions Set

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Question;1 Supply and;Demand.;The economic times in which we live are fascinating for a;number of reasons. We have recently seen a recession, heard talk of a;?recovery?, and lately seen gasoline prices change. Using what you know about a;supply and demand scenario give some causal factors impacting the gasoline;market as of late (two would be enough). Tell whether each impacts the supply;side of the market or the demand side of the market and whether it causes a;rise or a fall in the price of gasoline. Your answer can use either ?long term?;or ?short term? impacts on the market.;2 Efficiency;and Market Outcomes.;Explain in your own words what an economist means when she;refers to a market outcome as being efficient. Following that explain an;example of an externality, describing if the externality is positive or;negative and if it impacts the supply or the demand side of the market. Explain;how the market outcome compares to the socially optimal (or efficient) outcome.;Also, explain a solution to the externality that a policy maker could take.;3 Splitting up;Demand.;We frequently see market demand and supply curves as;depicting an equilibrium in a market place. Think for a moment if I were to say;that the demand for smart phones has increased tremendously over the past two;years as the available technology has increased usability and desirability.;Nobody would object to that statement and we would think about all the smart;phones we see in the marketplace. However, if we all began shopping for new;smartphones our first step would be to determine which smart phone to buy. It;must be the case then that somehow market demand is ?split? into demand for;particular models of cell phones. Think about this example and begin to;generalize and create an explanation ? in layman?s terms ? about how market;demand may be split, not just in the smart phone market but in other;?aggregated markets? in general.

 

Paper#56493 | Written in 18-Jul-2015

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