micro econ exam 2 2006 - Economics 1123(Honors A Holmes Exam#2 Fall 2006 ANSWER 4 OF TEE FOLLOWING 6 QUESTIONS"1 Show with the use of the perfectly

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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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