Help w/ Micro Economics

[PremiereFitness]

Does anyone know an answer to any of these questions?

3) What, if any, is the difference between "Government intenvention in free markets" and "Government interference in free markets?"

4)Why does the demand for cocaine pose problems for the DEA? Explain, in the context of price elasticity of demand.

5) Why are businesses willing to pay Cindy Crawford millions of dollars to say, "There's no substitute for Pepsi?" explain in the context of price elasticity of demand.

6)Why are businesses willing to sell newspapers in a vending machine where people can take more than one, but businesses are not willing to sell M&M's in that same way? Explain fully.

7) Explain in language accessible to the general public: the condition for consumer equilibrium = MUa/Pa = MUb/Pb =...=MUz/Pz.

8) Explain why it is possible for an accountant to look at a firm's Profit /loss statement and conclude that firm is making a profit, but an economist might look at the same Profit / Loss statement and conclude the firm is making a loss?

9) Despite the fact that not many markets are perfectly competitive, why is the study perfect competitive markets still worthwhile? (At least two reasons).

[nitroduck]

You want all these long explanations or bullet points..

[PremiereFitness]

Originally Posted by nitroduck

You want all these long explanations or bullet points..

anything will help

[nitroduck]

included below

Originally Posted by PremiereFitness

Does anyone know an answer to any of these questions?

3) What, if any, is the difference between "Government intenvention in free markets" and "Government interference in free markets?"

Intervention is regulation, interference could be considered stopping shorting bank stocks like they recently did.

4)Why does the demand for cocaine pose problems for the DEA? Explain, in the context of price elasticity of demand.

5) Why are businesses willing to pay Cindy Crawford millions of dollars to say, "There's no substitute for Pepsi?" explain in the context of price elasticity of demand.

Don't remember. But I would say she is one of a kind which causes the price to skyrocket and the demand for her is so high.


6)Why are businesses willing to sell newspapers in a vending machine where people can take more than one, but businesses are not willing to sell M&M's in that same way? Explain fully.

No one wants more than one of the same newspaper, it is a good that is thrown out and more than one will not help Demand = 1 per day. M&Ms are edible and people demand more than one bag at a time Demand = 5 per day.

7) Explain in language accessible to the general public: the condition for consumer equilibrium = MUa/Pa = MUb/Pb =...=MUz/Pz.

8) Explain why it is possible for an accountant to look at a firm's Profit /loss statement and conclude that firm is making a profit, but an economist might look at the same Profit / Loss statement and conclude the firm is making a loss?

Accountant looks at past profit/loss
economist looks into the future (sees decline profit or rising loss over time)


9) Despite the fact that not many markets are perfectly competitive, why is the study perfect competitive markets still worthwhile? (At least two reasons).

[PremiereFitness]

Originally Posted by nitroduck

included below

THANK YOU, you really have no idea how much I appreciate this.

[cventres]

8.) Accountants look at "accounting profit" that is anything over break even point (all costs) whereas Economists look at "economic profits" as in what your doing is the earning the best return on your money.

[fromnewyork]

Originally Posted by PremiereFitness

Does anyone know an answer to any of these questions?

3) What, if any, is the difference between "Government intenvention in free markets" and "Government interference in free markets?"

Government interference is a result of the governments day to day regulation of economic policies and workings. Intervention is something similiar to what we've seen in the US where the government steps in to promote the overall vitality of the economy.

4)Why does the demand for cocaine pose problems for the DEA? Explain, in the context of price elasticity of demand.

Cocaine poses problems for the DEA because it is an elastic good. By this, I mean a change in price not result in a decrease in demand. Given the addictive nature of cocaine, a price increase will always be met by the consumer. In an essence, this is a b*tch for the DEA because coke will always be floating around no matter what the market price is.

5) Why are businesses willing to pay Cindy Crawford millions of dollars to say, "There's no substitute for Pepsi?" explain in the context of price elasticity of demand.

This is the opposite of the cocaine problem. Pepsi is an inelastic good. This means that as Pepsi raises their prices demand will fall. Why wouldn't it? Coke tastes the same. If pepsi all of a sudden charged $2.00 instead of $1.50 for a can of pepsi, consumers might opt to buy a $1.50 can of Coke instead. As price increases, there is a stronger reaction by the consumer. They pay Cindy Crawford millions to keep their image and justify their prices/price increases.

6)Why are businesses willing to sell newspapers in a vending machine where people can take more than one, but businesses are not willing to sell M&M's in that same way? Explain fully.

I could eat M&M's all day. I only read 1 newspaper a day. Net costs for fatties munching on m&m's all day would be astronomical.
7) Explain in language accessible to the general public: the condition for consumer equilibrium = MUa/Pa = MUb/Pb =...=MUz/Pz.

LOL this is such a Micro question but to be honest I don't even recognize whats trying to be represented here...

8) Explain why it is possible for an accountant to look at a firm's Profit /loss statement and conclude that firm is making a profit, but an economist might look at the same Profit / Loss statement and conclude the firm is making a loss?

Economists factor in inflation, and tend to be more analytical in seeing the overall direction the firm is heading.

9) Despite the fact that not many markets are perfectly competitive, why is the study perfect competitive markets still worthwhile? (At least two reasons).

Not sure.

[u5711]

edit : wow i actually think this is one of the better threads today. i learned something... newspaper example was interesting.