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Microeconomics Question from Walter E. Williams:Edit

Write a very short comment on each of the following questions:

  • (a) "Fishing in the ocean leads to too many resources being devoted to fishing." First explain what is meant by "too many."
  • (b) Tourists in foreign countries pay higher prices for a given item than do the indigenous residents.
  • (c) Mechanics tend to charge women higher prices for a given emergency repair than that charged men.
  • (d) Why might it be legal for anyone to give free medical advice but if he is going to charge for medical advice he needs a license.
  • (e) "Thou shalt not plow with an ox and an ass together."

AnswerEdit

  • (a) WEW-031 part (a)
  • (b) True. Tourists have a more inelastic demand curve than indigenous residents due to time constraints, lack of information, etc. The result is that a higher price will can be charged to tourists without losing a significant amount of tourist demand

added caveat:? THIS IS ONLY IF IT IS EASY TO PRICE DISCRIMINATE. See Stigler's Econ of Info article

  • (c) WEW-029 part (d)
  • (d) The supply of “quality” medical advice free of charge is very limited and is therefore not a threat to the medical profession.
  • (e) Using an ox and ass together is more costly than using two oxen or two asses. If you have one ox, the marginal cost of adding another ox is less than the marginal cost of adding an ass (in terms of yoking the dissimilar animals to the same plow). Another possibility is that it is a command to specialize in the areas where each animal has a comparative advantage (reflecting the importance folklore placed on this principle).

Other Questions:Edit

Next: WEW-069
Previous: WEW-066

WEW Questions 61-80
WEW-061WEW-062WEW-063WEW-064WEW-065WEW-066WEW-067WEW-068WEW-069WEW-070
WEW-071WEW-072WEW-073WEW-074WEW-075WEW-076WEW-077WEW-078WEW-079WEW-080

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