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Explain what is meant by product mix efficiency and discuss the conditions under which the market will give us product mix efficiency. In your explanation of product mix efficiency, you should discuss what slopes are relevant for product mix efficiency and how they are relevant. While I expect to see the equation for product mix efficiency as part of your answer, you are also expected to explain the intuition behind the equation to demonstrate you understand the economics. (Note: this is often referred to as Pareto efficiency in a production economy).

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Related questions

Explain what is meant by exchange efficiency and discuss the conditions under which the market will give up exchange efficiency. In your explanation of exchange efficiency, you should discuss what slopes are relevant for exchange efficiency and how they are relevant. While I expect to see the equation for exchange efficiency as part of your answer, you are also expected to explain the intuition behind the equation to demonstrate you understand economics. (Note: this is referred to as Pareto efficiency in pure economy exchange.)

Purpose of Assignment

In Week 2, students will employ the supply and demand model to develop consumer surplus and producer surplus as a measure of welfare and market efficiency. Students learn about welfare economics--the study of how the allocation of resources affects economic well-being--and will discover that under most circumstances, the equilibrium price and quantity is also the one that maximizes welfare. Students will review different sources of externalities and a variety of potential cures and will see that while markets are usually a good way to organize economic activity, governments can sometimes improve market outcomes. Students will see how the U.S. government raises and spends money and the difficulty of making a tax system both efficient and equitable.

Assignment Steps

Scenario: Imagine you have been assigned the responsibility of preparing a paper for the governor's next economic conference.

Prepare a 1,050-word paper addressing the following:

Explain why equilibrium of supply and demand is desirable.

Explain the following concepts using the concept of consumer and producer surplus:

Efficiency of markets

Costs of taxation

Benefits of international trade

Discuss how externalities may prevent market equilibrium and the various government policies used to remedy the inefficiencies in markets caused by externalities.

Analyze the difference between the efficiency of a tax system and the equity of a tax system as it refers to the costs imposed on taxpayers using the benefits principles.

Cite a minimum of three peer-reviewed sources, not including your textbook.

Format consistent with APA guidelines.

Scenario: Consider your last big purchase such as a car, appliances, home improvement, home purchase, computer equipment, college tuition, or another "big-ticket" item, which are often purchased using loans/financing (by borrowing money). Also consider your decision-making process that led you to choose a particular make, model, or brand of the product (or service) you purchased and whether it was the right time to make the purchase given economic conditions at the time of your purchase. While analyzing your decision, keep in mind everything from interest rates to the prices of complementary and substitute goods are driven by human economic behavior.

Develop a minimum 1,050-word analysis of your decision-making process in which you include the following:

Retrieve from https://fred.stlouisfed.org and insert into your paper charts showing: Real Gross Domestic Product (Google FRED GDP) Real GDP per Capita (Google FRED GDP per Capita) Real Personal Consumption Expenditures (etc) Median Housing Prices and discuss the trend relationship between these variables since 2005.

Retrieve from https://fred.stlouisfed.org and insert into your paper charts showing: Bank Prime Loan Rate Consumer Price Index Unemployment Rate and discuss the trend relationship between these variables since 2005.

Describe your last big purchase and discuss the influence of the economic varibles charted. Also discuss any government programs, such as tax credits or tax deductions for energy-saving/efficiency purchases, on your decision to make your last big purchase. If government incentives did not factor into your decision, explain why not.

Cite a minimum of three credible sources. Note: The Federal Reserve Bank of St. Louis, the Bureau of Economic Analysis, and the Bureau of Labor Statistics are credible reference sources.

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