[SOLVED] Economics Micro and Macro
Question 1: Respond in at least 300 words. (All three parts; a, b and c, together should be at least 300 words)Hydraulic Fracking became a popular form of exploring for fossil/nonrenewable forms of energy in United states in the early 2000. Fracking as a technology was not new and existed for a long time. However, this form of tapping for fuel source has been controversial from the very beginning. Here is a link to the idea of Hydraulic Fracking from the Internet. A simple search on the Internet can give you access to many resources and information to this concept. Provided below is only one such link : (I have tried to hyperlink it, but if it does not open, please copy and paste it in your url box)https://www.vox.com/cards/fracking/what-is-fracking (Links to an external site.)Based on your research, respond to the following question prompts:a. Using the Economic concept of Marginal analysis (marginal cost – Marginal benefit), what could be some of the cost considerations and benefit considerations in tapping oil and natural gas through fracking?b. Using the Market model, (Demand and Supply model), create a general scenario of the possible impact on fuel prices. (If sketching the graph is challenging, you can explain the impact in words, in detail).c. There was a period of time in the mid 2000’s through the early part of 2010’s, when fracking lost its popularity in United states. Many towns in North Dakota and other states which flourished at one time due to the business of fracking, became “ghost towns”. What could have been some of the causes of this?ORQuestion 2: Respond in at least 300 words (All three parts: a, b and c together should be at least 300 words).Coca-Cola has been focusing on selling more 7.5-ounce cans in displays near supermarket checkout lines. Previously Coke had relied more heavily on 20-ounce bottles displayed in the beverage sections of supermarkets. An article in the Wall Street Journal (Mike Esterl, “Coke under Pressure as Sales Abroad Weaken”, July 30, 2014) noted that, “The smaller 7.5-ounce mini-cans are typically priced at five to seven cents an ounce, compared with three or four cents an ounce for 12-ounce cans.” It quoted a Coca-Cola executive as arguing that consumers “don’t care about price. They will pick it up if you put Coke within arm’s reach”.Given this information, respond to the question prompts below:a. What is the Coca-Cola executive assuming about the price elasticity of demand for Coke? Briefly explainb. If the executive is correct, what effect will this marketing strategy have on the firm’s revenue? Briefly explain.c. Why did the executive believe that having the cans “within arm’s reach” in the checkout line was important? Could this positioning have an effect on the price elasticity of demand? What other factors do you believe will affect the price elasticity of this product?ANDQuestion 3: Respond in at least 300 words. (All the parts of the question together should be at least 300 words)A 2019 article in the New York Times was headlined: “Trump Thinks Dollar Is Too Strong, Blames Fed Policy.”a. What does it mean to say that the dollar is “too strong”?b. Which groups in the United States gain and which lose when the dollar is strong?c. Briefly explain the connection between Fed Policy (Monetary Policy) and the strength of the dollar.ORQuestion 4: Respond in at least 300 words.Based on an article in the Wall Street Journal (Ianthe Jeanne Dugan abd Telis Demos, “New Lenders Spring Up to Cater to Subprime Sector”, March 5, 2014) , an economist commented on the situation a bank faces when making personal loans to subprime borrowers. “You have to be alert to the trade-off between serving consumers and being viewed as taking advantage of them.” What do the banks mean by prime and subprime borrowers and how do they distinguish between these two categories of borrowers? If banks charge subprime borrowers a higher interest on loans than they charge prime borrowers, are the banks taking advantage of the subprime borrowers?
