Define an oligopoly. Explain the shape of the individual demand curve faced by an oligopolist. Do they produce homogeneous or differentiated
Economics Today: the Micro View” by Roger Miller (19th ed) – required text – Pearson=publisher
Chapter 26 = oligopoly
Define an oligopoly. Explain the shape of the individual demand curve faced by an oligopolist. Do they produce homogeneous or differentiated goods? Give examples.
Explain the reason why there is price rigidity in an oligopoly. How would competitors react if you were to raise price, decrease price? What will be the impact on TR?
What is the importance of a price leader? Is collusion legal? Why?
What does the game theory “prove”?
How do oligopolists deter entry into the market? Explain and discuss.
How does advertising differ in an oligopoly setting, as compared to pure competition, monopoly and monopolistic competition.
Chapter 28:
What do you understand as pure competition in hiring of factors of production? How would you graph this situation?(horizontal supply curve at the constant wage rate)= MFC
How come this line is horizontal? (all workers are hired at the same wage)
How is the MRP curve calculated? How could you derive this curve ( change in TR and MPP times price of output). What does it represent? (D for labor), why?
What is the reason why the MPP and MPR are downward sloping?
At what point will the firm maximize profits in hiring of resources (labor)?
How would you calculate the total profit from a number of workers hired and the wage that they are being paid?
Chapter 29:
How come the hiring of labor could be facing an imperfectly competitive market? (monopsony and labor unions). As a result how will the supply of labor look? (supply upward sloping showing the number of workers willing to work at the different wage rates + a steeped MFC curve that will show the increase in cost of hiring more workers; the cost is higher than the wage rate because previously hired workers need to get a raise to match the higher wage of the new worker/workers hired)
At what point will you maximize profits?(MRP=MFC) Graph the situation.
What will be the impact of labor unions on the wage in the industry? How large is the percentage of labor force belonging to a labor union? Why has this percentage been changing? How do you see the function of unions in today’s economy?
When comparing hiring under perfect and imperfect competition, how is the situation different?
Chapter 30:
How equal/unequal is income distribution in the US? How would you measure it? (Lorenz Curve, Gini coefficient)
What are the reasons for unequal income distribution? Which would you say is the most important reason?
How would you propose that we should reduce inequality in income distribution?
Chapter 32:
What are the advantages of international trade?
Distinguish between absolute and comparative advantage.
How does specialization among countries help in producing more goods and services on a global level? As a result of international trade a country can consume beyond its production possibilities curve.
On figure 33-2 analyze the flow of world trade. You will see that developed countries trade mainly with other developed countries.
What are the arguments against free international trade? Which would you say applies to the US?
What are the ways to restrict international trade (quotas, tariffs). How do they compare?
What is the purpose of international trade organizations?
Answer preview for Define an oligopoly. Explain the shape of the individual demand curve faced by an oligopolist. Do they produce homogeneous or differentiated
2466 Words