Economics today 18th edition pdf download

The above model relies on the assumption that unpaid survey respondents will give truthful responses about how they will vote and that they will actually cast a ballot in the election. The other model uses prices of financial assets legally binding IOUs issued by the Iowa Electronic Markets, operated by the University of Iowa, to predict electoral outcomes. The final payments received by owners of these assets, which can be bought or sold during the weeks and days preceding an election, depend on the shares of votes the candidates actually end up receiving.

This second model assumes that owners of these assets wish to earn the highest possible returns, and it predicts that the market prices of these assets provide an indication of the percentage of votes that each candidate will actually receive on the day of the election. See pages 8—9. Which of these two models for forecasting electoral results is more firmly based on the rationality assumption of economics?

How would an economist evaluate which is the better model for forecasting electoral outcomes? The model using prices from the Iowa Electronic Market is based more firmly on the rationality assumption because people who trade assets on this exchange based on poor forecasts actually experience losses.

This gives them a strong incentive to make the best possible forecasts. Unpaid respondents to opinion polls have less incentive to give truthful answers about whether and how they will vote. An economist would develop a means of evaluating whether prices in the Iowa Electronic Market or results of opinion polls did a better job of matching actual electoral outcomes.

Based on your answer to Problem 1—14, categorize each of the following conclusions as resulting from positive analysis or normative analysis.

See pages 11— A higher minimum wage will reduce employment opportunities for minimum wage workers. Increasing the earnings of minimum wage employees is desirable, and raising the minimum wage is the best way to accomplish this.

Everyone should enjoy open access to health care at no explicit charge. Heath-care subsidies will increase the consumption of health care. Positive b. Normative c. Normative d. Positive Define opportunity cost. What is your opportunity cost of attending a class at A.

How does it differ from your opportunity cost of attending a class at A. See pages 31— The opportunity cost of attending a class at A. Likewise, the opportunity cost of attending an A. If you are an early riser, it is arguable that the opportunity cost of the A. If you are a late riser, it may be that the opportunity cost of the A. As you are on the way to the concert, your friend tells you that if she had not bought the concert ticket, she would have opted for a restaurant meal, and you reply that you otherwise would have downloaded several movies.

Identify the relevant opportunity costs for you and your friend of the concert tickets that you purchased. Explain briefly. At the auction, a bank was seeking to sell a foreclosed property: a large Victorian house suffering from years of neglect in a neighborhood in which many properties had been on the market for years yet remained unsold.

In addition, to make the house habitable, she and her husband devoted months of time and unpaid labor to renovating the property. Why do you suppose that the bank was willing to sell the house to Ms. Based on the information provided in Problem , what is the opportunity cost to this student of allocating enough additional study time on economics to move her grade up from a 90 to a ?

If the student allocates additional study time to economics in order to increase her score from 90 to , her biology score declines from 50 to 40, so the opportunity cost of earning 10 additional points in economics is 10 fewer points in biology. Construct a production possibilities curve for a nation facing increasing opportunity costs for producing food and video games. Show how the PPC changes given the following events.

A new and better fertilizer is invented. People invent a new programming language that is much less costly to code and is more memory-efficient. A heat wave and drought result in a 10 percent decrease in usable farmland. Point D Readers learn best when they see concepts applied to examples from their everyday lives. The text shows readers how economics is front and center in their daily routines while providing them with many ways to evaluate their understanding of key concepts covered in each chapter.

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