Part 2: Test Bank: Pages 241-2095

SOLUTIONS MANUAL With Test Bank for Microeconomics

Sev enteenth Canadian Edition By Christopher T.S.Ragan Part 1: Solution manual: pages 1-240 Part 2: Test Bank: Pages 241-2095 1 / 4

Copyright © 2023Pearson Canada Inc.ii Contents

Part One: What Is Economics? 1

Chapter 1: Economic Issues and Concepts 3

Chapter 2: Economic Theories, Data, and Graphs 13

Part Two: An Introduction to Demand and Supply 26

Chapter 3: Demand, Supply, and Price 27

Chapter 4: Elasticity 40

Chapter 5: Price Controls and Market Efficiency 54

Part Three: Consumers and Producers 65

Chapter 6: Consumer Behaviour 66

Chapter 7: Producers in the Short Run 81

Chapter 8: Producers in the Long Run 95

Part Four: Market Structure and Efficiency 104

Chapter 9: Competitive Markets 105

Chapter 10: Monopoly, Cartels, and Price Discrimination 116

Chapter 11: Imperfect Competition and Strategic Behaviour 131

Chapter 12: Economic Efficiency and Public Policy 140

Part Five: Factor Markets 150

Chapter 13: How Factor Markets Work 152

Chapter 14: Labour Markets and Income Inequality 163

Chapter 15: Interest Rates and the Capital Market 175

Part Six: Government in the Market Economy 183

Chapter 16: Market Failures and Government Intervention 185

Chapter 17: The Economics of Environmental Protection 198

Chapter 18: Taxation and Public Expenditure 210

Part Seven: Canada in the Global Economy 219

Chapter 19: The Gain s from International Trade 220

Chapter 20: Trade Policy 229

Part 1: Solution manual 2 / 4

Copyright © 2023 Pearson Canada Inc.iii

List of Boxes Applying Economic Concepts 1-1 The High Opportunity Cost of Your University Degree7 1-2 Economics Needs the Other Social Sciences21 2-1 Where Economists Work30 2-2 Can Economists Design Controlled Experiments to Test Their Theories?34 3-1 Demand and Supply Shocks Created by the COVID-19 Pandemic 64 3-2 Why Apples but Not iPhones?72 4-1 Who Really “Pays” for Payroll Taxes?93 5-1 Minimum Wages and Unemployment105

5-2 The Debate Over “Price Gouging”: Efficiency Versus Public Virtue118

6-1 Rationality and Framing in Consumer Behaviour130 7-1 Is It Socially Responsible to Maximize Profits?160 7-2 Three Examples of Diminishing Returns168

7-3 The Digital World: When D iminishing Returns Disappear Altogether 174

8-1 The Significance of Productivity Growth191 9-1 Why Small Firms Are Price Takers207 9-2 The Parable of the Seaside Inn217 10-1 Network Effects as Entry Barriers239 12-1 Potential Mergers in the Canadi an Airline Industry302 14-1 The Rise of the “Gig” Economy356 15-1 Inflation and Interest Rates380 16-1 The World’s Endangered Fish398 16-2 Used Cars and the Market for “Lemons”404 18-1 Using a UBI to Eliminate Poverty466 19-1 Two Examples of Absolute and Comparative Advantage484 19-2 Comparative Advantage and Global Supply Chains492

20-1 Canadian Wine: A Free-Trade Success Story520

Lessons from History 4-1 Economic Development and Income Elasticities95 8-1 Jacob Viner and the Clever Draftsman189 9-1 What Do Whaling Ships and Oil Wells Have in Common?224 10-1 Disruptive Technologies and Creative Destruction241 12-1 Are Amazon and Facebook the Standard Oil of the Twenty-First Century?300 13-1 David Ricardo and “Economic Rent”327 20-1 Tariff Wars and the Stark Lessons from the Great Depression 508 3 / 4

Copyright © 2023 Pearson Canada Inc.iv Extensions in Theory 3-1 The Distinction Between Stocks and Flows53 11-1 The Prisoners’ Dilemma270 16-1 Arthur Okun’s “Leaky Bucket”406 18-1 Who Really Pays the Corporate Income Tax?450 19-1 The Gains from Trade More Generally482

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