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Jason Welker

A Micro problem for the advanced Econ student | Welker's Wikinomics Blog - 5 views

welkerswikinomics.com/...-for-the-advanced-econ-student

microeconomics monopoly Mankiw

shared by Jason Welker on 09 Nov 09 - Cached
  • Jason Welker on 09 Nov 09
     
    I love that Harvard Economics professor Gregory Mankiw blogs, but I hate that has de-activated the comments on his blog. Yesterday he posted a question from his own Harvard introductory economics class.  Since he doesn't allow comments though, I cannot tell if I'm solving it correctly. So I will re-publish it here and ask my readers to solve the problem in the comment section. IB and AP students who have studied microeconomic should be able to put some of their basic algebra skills to work to solve this one.
  • ...2 more comments...
  • Molly Saso on 10 Nov 09
     
    I may be wrong, but initially profit maximizing P and Q are $7 and 3 at MC = MR with profit of $10.5. Subsequently at a world price of $6, domestic demand is 4 units, but the monopolist's profit maximizing Q becomes 5 units (at MC =P). Therefore he exports one unit and his profit becomes $9.5. Thus the answer is a bit unexpected. I am not sure, but if the world price is $7 then does he produce 6 units of which he exports 3 units, since domestic demand falls? That conclusion presumes that he acts as a perfect competitor in the world market, but probably he will find a way of gaining global monopoly power! Molly
  • gene hayward on 10 Nov 09
     
    I think I solved most of it...I look forward to the answer...:)
  • Jason Welker on 10 Nov 09
     
    Molly, could you explain how you determined that at a world price of $6, the firm's profit maximizing Q would become 5 units? Why did we equalize P=MC to find the firm's output at a price of 6? I see why the firm becomes an exporter at a world price of $6 if they produce 5 units (since domestic Qs exceeds domestic Qd) but just not why we determine the firm's output by P=MC. Thanks!
  • Molly Saso on 17 Nov 09
     
    I guess I am assuming that once there is free trade the monopolist has to act like a perfect competitor and at least in the world market is a price taker. It's a bit like the monopsonist who has to become a wage taker once there is an effective minimum wage. Consequently he employs more workers since his MFC equals the wage.
Jason Welker

Nouriel Roubini - What America needs is a payroll tax cut - 2 views

www.washingtonpost.com/...AR2010091605846.html

shared by Jason Welker on 17 Sep 10 - No Cached
  • The administration knows that it needs to fashion a revenue-neutral fiscal stimulus that increases labor demand and consumption. Its proposal to make permanent a research and development tax credit that dates to the 1980s, and then to enact a temporary investment tax credit allowing firms to write down capital investments at 100 percent of cost, are welcome -- but too modest a cure for what ails the economy. A much better option is for the administration to reduce the payroll tax for two years. The reduced labor costs would lead employers to hire more; for employees, the increased take-home pay would boost much-needed economic consumption and advance the still-crucial process of deleveraging households (paying down credit card debt and other legacies of the easy-credit years).
  • Jason Welker on 17 Sep 10
     
    Roubini says cut payroll tax to relieve households and encourage hiring.
Jason Welker

Knowledge Learning Corporation | Child Care & Education Services - 3 views

knowledgelearning.tms.hrdepartment.com/...highlightjob.cgi

teaching Economics Advanced Placement online education

shared by Jason Welker on 05 Nov 09 - No Cached
  • Jason Welker on 05 Nov 09
     
    I've always thought about how great it would be to teach Economics from my ski cabin in the mountains of Northern Idaho... perhaps teaching AP Econ online would be the way to go! Here's the deal: "Are you looking for a great opportunity, a rewarding career, or the chance to make a difference? KC Distance Learning is hiring NCLB Highly Qualified High School certificated teachers to fill positions across the country. We currently have part-time and full-time positions available for qualified teachers who want to work from their home.  Working at KCDL you will enjoy a flexible work environment, utilize the latest distance learning and communications technology, and, best of all, you can help students from all walks of life achieve their individual potential."
Jason Welker

CARPE DIEM: U.S. Share of World GDP Remarkably Constant - 5 views

mjperry.blogspot.com/...e-of-world-gdp-remarkably.html

shared by Jason Welker on 25 Nov 09 - Cached
gene hayward liked it
  • The chart above shows the annual shares of real world GDP for four geographical regions (European Union 15, Asia/Oceania, Latin America and the combined share of Africa and the Middle East) compared to the U.S. share of world GDP between 1969 and 2009 (data here). What might be surprising is that the U.S. share of world GDP has been relatively constant for the last 40 years, and is actually slightly higher in 2009 (26.7%) that it was in 1975 (26.3%). It's also interesting that the EU15's share of world GDP has declined from about 36% of world output in 1969 to only 27% in 2009. Further, despite having a large share of the world's oil reserves, the Middle East's share of global output has increased from only 2.23% in 1969 to 3.16% in 2009 (graph shows Middle East combined with Africa).
  • Bottom Line: World GDP (real) doubled between 1969 and 1990, and has increased by another 60% since then, so that world output in 2009 is more than three times greater than in 1969. We might mistakenly assume that the significant economic growth over the last 40 years in China, India and Brazil has somehow come "at the expense of economic growth in the U.S." (based on the "fixed pie fallacy") but the data suggest otherwise. Because of advances in technology, innovation, and significant improvements in U.S. productivity, America's share of total world output has remained remarkably constant at a little more than 25%, despite the significant increases in output around the world, especially in Asia.
    • Jason Welker
      Jason Welker on 25 Nov 09
       
      A good conversation starter for an AP Macro class!
  • Somewhat surprisingly, the Economic Research Service of the U.S. Department of Agriculture has some great international historical macroeconomic datasets. According to its website:
  • gene hayward on 25 Nov 09
     
    I find it amazing (and troubling) that Latin America and Africa have made no appreciable gains in 40 years. They are rich in human capital and other productive resources....as a side note, I noticed in one of the comments on the blog you found this graphic there was some conversation about the CPI and that it was reconfigured in the 1990's(?) and that with the new method inflation is underestimated, therefore RGDP must be overstated...I have to admit ignorance on this issue...Are you familiar with it? Any commments as to the validity of the underestimation of inflation? Thanks!!
  • Jason Welker on 26 Nov 09
     
    Gene, I'm not sure we should be so troubled by the flat trend lines for Latin America and Africa. Keep in mind, this is not GDP, this is share of world's GDP. Unlike total output, which is NOT a zero sum concept, share of total output IS a zero-sum concept. A gain made by one part of the world is only possible by a loss made in another part of the world. The decline of the EU 15's share of world GDP does not mean that the EU 15 experienced a decline in output. In fact, the EU 15 have grown steadily over the last 40 years. Their downward sloping curve indicates that they have grown more slowly than the rest of the world, that's all. So the flat lines for Africa and Latin America in fact indicate that those two regions have grown more rapidly than Europe. Although it doesn't look like it on this graph, the "poor south" is actually catching up with the "rich north" as average growth in Europe lags behind that in the south. It's a bit misleading to interpret the graph in this way, but the gains in Asia have in a way come at the expense of gains in Europe, but only in that they now have a larger share of a MUCH larger pie! All regions have grown, and Latin America and Africa have grown AS quickly as the US, and MORE quickly than Europe. Good news!
  • gene hayward on 26 Nov 09
     
    Thanks for the reply and the analysis...I did not occur to me to think of it in those terms...I am better off for asking the question!!! :)
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