December 2020

Briefly explain whether the value of U.S. exports is typicallylarger or smaller than the value of U.S. imports. Define informative content of a time series illustrating imports and exports divided by GDP of a country over 50 years.

What are the main tasks of the WTO? Hint: you may refer to the “What we are” section of the WTO website. What is globalization? Why are some people opposed to globalization?

What is protectionism? Who benefits and who loses from protectionist policies? What are the main arguments people use to justify protectionism? What is dumping? Who benefits and who loses from dumping? What problems arise when anti-dumping laws are implemented?

The following table shows Lee’s utility from consuming ice cream cones and cans of Lime Fizz soda: a. Ed inspects this table and concludes, “Lee’s optimal choice would be to consume 4 ice cream cones and 5 cans of Lime Fizz because with that combination, his marginal utility from ice cream cones is equal to his

What is the economic definition of utility? Is it possible tomeasure utility? Define a consumer’s budget constraint and explain why it matters when making optimal consumption decisions.

How does a change in the price of a product cause both a substitution effect and an income effect? Does the law of diminishing marginal utility hold true in every situation? Is it possible to think of goods for which consuming additional units, at least initially, will result in increasing marginal utility?

Does the fact that the last unit of a person’s income spent on different products and services should give the same marginal utility imply that people should not save at all? Briefly explain.

Consider two goods: pillows and blankets. If a hotel increases the utility from pillows to blankets, then it increases the utility of pillows more than it decreases the utility of blankets. This means it moves dollars from pillows to blankets. How can you maximize the total utility using the marginal utility per dollar theory? Q18:

Briefly explain how the consumption behavior of others can affect the choices made by a rational individual, pertaining to the consumption of a good or service.

What are network externalities? For what types of products are network externalities likely to be important? What is path dependence? Can celebrities affect the consumption behavior and choices of rational, utility-maximizing individuals? Briefly explain.