Unformatted text preview: Economics 1123 (Honors) A. Holmes Exam #2
Fall 2006 November 15, 2006 ANSWER 4 OF TEE FOLLOWING 6 QUESTIONS: \"1. Show with the use of the perfectly competitive model how differential taxes, say
different property taxes from one state to another, would effect firms in the long run. _ 2. Why does the market supply curve have the elasticity that it has? Demonstrate your
answer with the use of graphs. ' 3. ' What differences are there between the economist and the accountant in terms of costs
and profits? ' 4. Develop the model of perfect competition (short-run equilibrium analysis) and tie
SPECIFICALLY and DLRECTLY each of the assumptions of the model to whatever
graphs you deem necessary for your analysis. 5. What is meant by the term “economic efficiency”? How is this different from
technical efficiency? How might one critique following a policy that single—mindedly
pursues economic efficiency? 6. Presume an agricultural market that is perfectly competitive . Further, assume that
attempts to organize labor (form unions) are taking place. If any increase in cost that is
applied uniformly across the industry will simply raise all firms’ costs, why do we
observe the resistance to labor organization by growers? (Hint: You will need a long-run
analysis to reach any interesting conclusions). ...
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- Spring '08
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