Principles of Microeconomics UNITS IV & V

Principles of Microeconomics UNITS IV & V

1. What is the price of an hour of leisure? An hour of nonmarket work? What does it mean to say that leisure is a normal good? Why doesn’t the market supply curve for labor bend backward?

2. What does it mean to say that the demand for a resource is a derived demand? Why does the supply curve of a resource slope upward?
3. Distinguish between mediation and arbitration. Explain how industrial unions tend to raise wages and why unemployed workers do not offer to work for less money.

4. If work provides disutility, why do people ever engage in either market work or nonmarket work?

5. Distinguish between craft unions and industrial unions.

6. Can the problems of imperfect and asymmetric information be used to enrich Coase’s theory of the firm? How?

7. Describe Coase’s theory of the firm.

8. What are economies of scope? How do they differ from economies of scale?

9. Suppose a third project will cost $20,000 today and yield a return of $2,500 a year indefinitely. What is the present value of the project? What is the present value if the interest rate increases to 20 percent?

10. How is the model of corporate finance developed in the second part of Chapter 13 related to the model developed in the first part of the chapter concerning roundabout production and the market for loanable funds?
All response should be at least 75 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.

The following book below is to be referenced.

McEachern, W. A. (2012). ECON Micro 3 (3rd ed.). Mason, OH: South-Western.

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