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32-17=

1. 28,8-17=. 32-17=. 55x0,70=. 6x0,60=. 1. Let’s take the table from the first question

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32-17=

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  1. 1 28,8-17= 32-17= 55x0,70= 6x0,60=

  2. 1

  3. Let’s take the table from the first question Let’s assume wages to be $12, then it will be good for society to employ the 2nd workers: spends $12 and produces $13.5. But the firm will not hire him, for prices will go down  the MRPL is only 11.8 , which is smaller than 12 (the firm is losing here!) 2

  4. Examples 2 • Natural monopolies : railroads, water companies, electricity, army, justice. • Legislative monopolies : taxi drivers, exclusive licenses, mail. They are usually old natural monopolies which are now obsolete. • Illegal Monopolies: drug markets in some countries.

  5. Solutions (?) 2 • Price system: if prices are that enticing, others will eventually enter the market • Monopolies should disappear if markets are allowed to work • Natural monopolies are usually administered by the state (but, aren’t they costly for the state as well?) • Legislative monopolies are due to politics rather than economics. Those who reap the benefits are the politically well connected (“crony capitalism”) • Illegal monopolies  What if you legalize them?

  6. 2 • In general, the cost of producing drugs is low, and “anyone” could do it. But when you have to add such things as security and bribes then it becomes expensive. • Why the benefits are significantly high? • Cartels / monopolies

  7. Perfect competition 3 If wages go from $6 to $10, employment goes from 450 to 310 (difference of 140)

  8. Monopoly 3 If wages go from $6 to $10, employment goes from 310 to 250 (difference of 60)

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