[Solved] 1. We often hear you canlie with statistics. This is one way

1. We often hear you canlie with statistics. This is one way of saying statistics can be easilymiscommunicated. Find one example of how statistics are miscommunicatedand explain why there was a miscommunication and what you would do to correctthis problem.2. Using probability: Howcan you use probability to improve your chances of winning at a casino. Providespecific examples using concepts learned in this module.3. Outliers: We know manytypes of data fall into a normal distribution with most of the observationsfalling toward the middle. However, sometimes data are outliers or data thatare very different—larger or smaller—from the rest of the members of thesample. Think of an example in the real world of an outlier and discuss itseffect.4. Errors in testing: Thinkof one example of a Type I and Type II error in everyday life and comment onthe ramifications of those errors.5. Association: We knowassociation does not imply causation, but what does this mean in your ownwords. Provide and discuss an example of two variables that are associated butnot by a cause and effect relationship.6. How does Adam Smith’s conceptof the invisible hand explain why markets move toward equilibrium? Domarket participants need to know about the invisible hand for it tofunction? Explain your answer.7. Use the demand curvegraph found at the following link to answer the questions that follow.Demand Curve·· How would point A berepresented as an ordered (x,y) pair?· What does this D1 curveshow?· Does this D1 curveshow a positive or negative correlation between price and quantity?· Compute the slope of D1 betweenpoints A and C.· What is the slope of D1 betweenpoints C and E? Why would you not have tocalculate this answer?· What is it called if wemove from curve D1 to curve D2?· How do you know that theslope of D2 is the same as the slope of D1?8. Use the demand curvegraph found in the following link to answer the questions (same graph as usedin previous question):Demand Curve·· Using the midpointmethod, calculate the the elasticity of demand between points A and C, C and E. and B and D.· As quantity demandedmoves from point A to point E does theelasticity of demand become unitary at some point? Why or why not?9. What is the differencebetween a positive statement and a normative statement? Determine whether eachof the following statements is positive or normative.·· The minimum wage createsunemployment among young and unskilled workers.· The minimum wage ought tobe abolished.· If the price of aproduct in a market decreases, other things equal, quantity demanded willincrease.· A little bit ofinflation is worse for society than a little bit of unemployment.· There is a tradeoffbetween inflation and unemployment in the short run.· If consumer incomeincreases, other things equal, the demand for automobiles will increase.· The U.S. incomedistribution is not equitable.· U.S. workers deservemore liberal unemployment benefits.· If interest ratesincrease, investment will decrease.· If welfare benefits werereduced, the country would be better off.10. Gary and Diane mustprepare a presentation. As part of their presentation, they must do a series ofcalculations and prepare 50 PowerPoint slides. It would take Gary 10 hours todo the required calculation and 10 hours to prepare the slides. It would take Diane12 hours to do the calculations and 20 hours to prepare the slides.·· How much time would ittake the two to complete the project if they divide the calculations equallyand the slides equally?· How much time would ittake the two to complete the project if they use comparative advantage andspecialize in calculating or preparing slides?· If Diane and Gary havethe same opportunity cost of $5 per hour, is there a better solution than foreach to specialize in calculating or preparing slides?11. Thoroughly describe thecharacteristics of each of the following market types. Give an example of afirm in each market type and explain how it meets the criteria for that markettype.·· Perfect competition· Monopoly· Oligopoly· Monopolistic competition12. Use the graph found atthe link below to answer the questions that follow. Your answer for eachquestion should be a letter.Graph·· The elastic section ofthe graph is represented by section ___.· The inelastic section ofthe graph is represented by section ___.· The unit elastic sectionof the graph is represented by section ___.· The portion of the graphin which a decrease in price would cause total revenue to fall would be ___.· The portion of the graphin which a decrease in price would cause total revenue to rise would be ___.· The portion of the graphin which a decrease in price would not cause a change in total revenue would be___.· The section of the graphin which total revenue would be at a maximum would be ___.· The section of the graphin which elasticity is greater than 1 is ___· The section of the graphin which elasticity is equal to 1 is ___.· The section of the graphin which elasticity is less than 1 is ___.13. Use the graph found atthe link below to answer the questions that follow.Grapha. What is the effect of a$300 price ceiling on this market? Would this be a binding price ceiling?b. What is the effect of a$700 price floor on this market? Would this be a binding price floor?c. Why would policymakerschoose to impose a price ceiling or price floor on a market?14. The government decidesthat eating ice cream is a socially desirable activity and passes a law givingconsumers 50 cents for each ice cream cone they eat. What is likely to happenin the marketplace once this policy is in effect? What are consumers likely todo? How are suppliers likely to respond?15. Answer each of thefollowing questions on supply and producer surplus.What is producer surplus,and how is it measured? What is the relationship between the cost to sellersand the supply curve? Other things equal, what happens to producer surplus whenthe price of a good rises?16. Explain Arthur Laffer’stheory of tax rates relative to tax revenue. What is the effect of a tax on thedeadweight loss? Why is it sometimes difficult to predict what will happen whena tax rate is decreased or increased?17. Describe both quotas andtariffs. How do they impact domestic prices and deadweight loss? How does animport quota differ from an equivalent tariff? What is best for a nation as awhole: a tariff, a quota, or free trade? Explain your answer.18. Although most economistsagree that free trade is beneficial for a country, there are numerous argumentsagainst free trade. Describe five of the arguments against free trade.19. Describe the Coasetheorem, which suggests that efficient solutions to externalities can bearrived at through bargaining. Explain how this happens. Under whatcircumstances does bargaining fail to produce a solution?20. Why do wild salmonpopulations face the threat of extinction while pet goldfish populations are inno such danger?21. Define and explain theterms income tax and consumption tax. What would be thebenefits of taxing consumption and not income?22. List the federalgovernment’s three most important sources of tax revenue. How do these differfrom your state government’s three most important sources of tax revenue andthose of local government? Why do you think that these different governmententities use different tax bases?23. Examine the table at thefollowing link, which shows what four consumers willing to pay for a haircut:Consumer Willingness to Pay TableThe next link includes a table that shows whatfour businesses charge for a haircut:Business Charge TableEach business can produce no more than one haircut.·· In the most efficientworld, which companies should cut hair and which customers should get ahaircut? (Note: It might be less than 4.)· How large is the maximumpossible total surplus and what is the least possible surplus?24. At its current level of production, a profit-maximizing firm in acompetitive market receives $12.50 for each unit it produces and faces anaverage total cost of $10. At the market price of $12.50 per unit, the firm’smarginal cost curve crosses the marginal revenue curve at an output level of1000 units. What is the firm’s current profit? What is likely to occur in thismarket, and why?25. Under what conditions should a firm shut down production in theshort run? Under what conditions should a firm shut down in the long run?Explain the difference between the short and long run conditions.26. Define and explain the relationship between total revenue, averagerevenue, and marginal revenue for a monopolist. What is monopoly profit? Shoulda monopolist produce quantities of product greater than that which wouldmaximize profits?27. In what ways can a government create a monopoly? Why might agovernment do this?28. Explain the output effect and the price effect for an oligopoly.How does each influence the oligopolist’s production decision?29. What is a natural monopoly? How does a natural monopoly lead tolower costs than would exist if there were more than one firm in an industrythat is a natural monopoly?30. Entry of firms in a monopolistically competitive industry ischaracterized by two ‘external’ effects. What are these effects andhow do they affect a monopolistically competitive firm. How are consumers andincumbent firms influenced by these externalities?31. Does a monopolistic competitor produce more or less output ascompared to an efficient level of production? Explain. What are the benefitsand drawbacks of this? Should the government intervene to alter this?32. In order to determine whether his time is being spent optimally,over the past year a commercial fisherman has recorded the information shown intable at the following link; he has recorded the hours he has spent per dayfishing and the quantity of fish caught. What is the marginal product of fishper hour spent?Fisherman’s TableThefisherman has a fixed cost of $200 per day and variable costs of $150 per hour(wages and fuel).Fillin the information missing in the following table.Table to CompleteThe fish sell for for $100 a ton. How many hours fishing per dayhe work in order to earn a maximum profit on his day’s activity? And how muchis that profit? Please show all of your calculations.33. Labor is the only inputused by a perfectly competitive firm. It hires workers for $50 a day. Thefirm’s production function is as shown in the following Table. (The table will open in a new window.)Each unit of output sells for $10.·· Complete the table toshow the marginal product of labor and the value of the marginal product oflabor.· How many days of laborshould the firm hire? Explain.34. Describe the factors ofproduction. What are the returns to these factors (their price)? Describe themarginal products of each factor and how the value of the marginal product ofeach factor is determined.35. Describe the process bywhich the market for capital and the market for labor reach equilibrium. Whathappens to each if demand for the final product were to increase? Why?36. Do consumers play a rolein perpetuating discrimination in labor markets? If so, how? If not, explainthe reasoning for your answer.37. Explain the concept ofdiminishing marginal utility. Since all goods are scarce, does diminishingmarginal utility contradict the statement that individuals always want more ofall goods?38. Describe each of thefour properties of indifference curves.39. Describe and explain thebudget constraint. How does a consumer maximize utility under a given budget constraint?How do consumers know if they are not maximizing utility?40. Explain what is meant by’asymmetric information.’ Identify and explain the two basic types ofproblems that arise when there is asymmetric information.41. Explain the CondorcetParadox, the failure of majority rule to produce transitive preferences forsociety. Explain Arrow’s impossibility theorem. What does this say aboutsociety’s choices?42. When prices change, theincome effect and substitution effect both contribute to the impact on quantitiesconsumed. Explain how both affect a consumer’s utility maximization.43. Public policies oftenalter the costs and benefits of private actions. Why is it important for policymakers to consider both the direct and indirect effects of public policies? Selecta particular public policy with which you are familiar and discuss two positiveand two negative aspects of that policy. What goal do you think the policymakers were trying to achieve in effecting that policy? Do you believe it wassuccessful? Why or why not?44. Givean example of a monopoly and an example of perfect competition. Explainhow each of your examples matches the textbook definition of that marketstructure.45. Why is the concept ofelasticity important? What does it tell economists? Choose an industry withwhich you are familiar and tell whether you would classify it as either elasticor inelastic in the short run and long run. (Keep in mind that we are talkinghere about supply elasticity, not demand elasticity.) Explain your answer usingdeterminants of elasticity.·46. What happens to thegains from trade when a tax is imposed? Choose an industry in which you work orwith which you are familiar. How would a tax affect sales, supplier revenue,and consumer buying power in that industry?·47.Give an example of apositive and a negative externality. Would a Coasean solution resolve theeconomic efficiency of the externalities you cite? Why or why not?·48. In Costa Rica, only afew beaches remain that are nesting grounds for sea turtles. Some of thosebeaches have communities situated near them; traditionally, the local peoplecollected the turtle eggs and sold them for their purported aphrodisiac powers.As a result, sea turtle populations became endangered. To protect the seaturtle populations, the Costa Rican government gave each family in thesevillages ownership of a portion of the beach to do with as the family pleases,including the harvesting and selling of sea turtle eggs. Sea turtle populationshave started to increase. The economic rationale for this action has to do withthe differences between public, common, and private goods. Select an example ofyour choosing that would display how the government could take an action (orhas actually taken one) that might change how a resource would be treated in thefuture. Take a look at common resources (such as the turtles) and use your ownexample to explain the economic rationale for a positive result.·49. Explain the statement:’Fixed costs exist only in the short run. In the long run there are nofixed costs.’ Why might the time frame for the ‘short run’differ from one industry to the next? Provide examples of two industries withdifferent time frames for the short run. Explain why this is the case.50. In your text (refer toChapter 17, Figure 4) you see a common resources game that asks ‘Should wedrill another well or not?’ Consider this game and describe what thedominant strategy is (as per your text). Consider what will happen if thisbecomes a repetitive game (both oil companies knowing they will share many oilfields over the next years). Will the dominant strategy survive, and—ifnot—what strategy could emerge as ‘best?’51. Brand names can be important to the success of a firm in someindustries. Consider industries that demonstrate monopoly, monopolisticcompetition, oligopoly, and perfect competition. What is the goal of creating abrand name for each of these market structures? What does the brand name do tothe demand curve for the product? What is the role of advertising in each ofthe four market structures? As you answer these question, illustrate yourpoints with original examples·52. What are the factorsthat affect pay differentials? How does each factor increase or decreaserelative wages? Explain howdiscrimination can cause pay differentials between men and women in similaroccupations. Explain how factors other than discrimination could affectrelative wages.53. Muchhas been made of the fact that people don’t consistently act withscientific rationality. What is meant by rationality? Considerthe three ‘systematic mistakes’ discussed in your text. What arethe costs of making those ‘systematic mistakes’? Is it possibleto act ‘irrationally,’ or is rationality defined by theindividual’s approach to decision making?