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South African Airways (SAA) and Quantas Airlines hold a duopoly- a ‘code-share’ – on direct flights from Australia to South Africa. The International Air Services Commission has indicated to the airlines that the tie-up may be cancelled at the end of 2015. The Commission warned the airlines to stop decreasing their flight capacity in order […]

Consider a simple Asian economy with only four markets (energy, food, labour, and capital) and two types of households (rich and poor). Explain why an excise tax on energy is likely to hurt white collar households more than the blue collar households, despite expectations that the opposite would be true. Assume that the proceeds of

Emerald Island has a climate that is suited to banana production and yields 840 pounds per acre. Tropical Springs has a climate that is not well-suited for bananas and yields only 250 pounds per acre. Emerald Island has a climate that is not well-suited for mango production and yields 325 pounds per acre. Tropical Springs

Many high street bookstores have adult and teen sections where the adult copies of the same books cost more than children’s copies, the only difference being the books’ cover. Prices between the two copies, for both paperback and hardcover, may differ by as much as 17%. Using the idea of price discrimination, explain the price

The following diagram illustrates the demand and marginal revenue curves facing a monopoly in an industry with no economies or diseconomies of scale. In the short and long run, MC=ATC. a. Calculate the values of profit, consumer surplus, and deadweight loss, and illustrate these on the graph.b. Repeat the calculations in part a, but now

Taylor Swift is a singer-songwriter whose pop album 1989 was the top-selling album of 2014, with 3.66 million copies sold in just its first 9 weeks of release. The path to success for pop musicians involves reducing the elasticity of demand that they face and building barriers to entry. That sounds like economic babble, but

Which of the following markets are likely to be perfectly contestable? Explain your answers. a. Coal miningb. Insurancec. Wind Farmsd. Landscapinge. Advertising

In a significant decision regarding patent eligibility, Alice Corp. v. CLS Bank International, the U.S Supreme Court in June 2004 effectively raised the bar for software patents by declining a patent on the grounds that implementation of claims based on abstract ideas were not patentable. The period from 2008 to 2013 had witnessed a doubling

Which of the following industries would you classify as an oligopoly? Explain your answer. If you are not sure, what information do you need to know to decide? a. Motorcyclesb. Hotelsc. Cruise linesd. Firearmse. Furniture

In 2007 Canadian authorities opened an investigation over allegations that major players in the Canadian chocolate market, including Nestle, Hershey, Mars and ITWAL conspired to fix prices and stifle competition by effecting coordinated price increases. Research the economic and legal details of this case and identify major decisions from 2007 to the present.