Econ 103B L16 April 1 Exam Review, Kerry's Tax Plan & Off Shore Tax Haven Video

8/8/2019 Econ 103B L16 April 1 Exam Review, Kerry's Tax Plan & Off Shore Tax Haven Video

1/23

Econ 103

Professor Norman Aitken


2/23

Second Hour Exam

Exam will be Tuesday April 6TH.

Make up exams for conflicts will be onWed. April 7, 9am-1pm. If you have a

conflict, email the course website with the

time you would like to take the exam and

the reason you need to take the makeup.

[email protected]


3/23

Second Hour Exam You must bring to the exam: 1) #2 lead pencil. (opscan

scanners don't read ink)

2) Picture ID Location: Exam Room Assignments according to first

letter of last name.

Last Name Exam Room

A-L Bartlett 65 (Lecture Hall)

M-O Bartlett 61

P-S Bartlett 119

T-Z Bartlett 301


4/23

TODAY

Off-Shore Tax Havens--Video

John Kerrys Tax Plan Review of Market Structures

Long Run Costs and Outcomes

PRS Quizzes


5/23

OffShore Corporate Tax Havens:

Video


6/23

John Kerrys Tax Plan


7/23

Features of Kerrys Tax Plan:

1. Closing loop holes on tax breaks to companiesexporting jobs (companies would pay same taxrate for money earned overseas and in the U.S.

2. A jobs credit giving companies consideringoutsourcing jobs a break on payroll taxes foreach new worker hired in the U.S.

3. 25% tax credit for small businesses to providehealth care for workers.

4. Reduce corporate tax rates by 5%

5. Enforce provisions in current trade agreementsthat protect American jobs


8/23

Long Run Costs and Outcomes


9/23

Long Run Equilibrium:

Conditions Achieved under PC

Efficient Production (Firms produce at

minimum Average Total Cost) Firms earn normal profit

Market Price = Marginal Revenue =

Marginal Cost Firms can change cost but not demand or

market price


10/23

Comparing Market Structures in

Long-Run EquilibriumLong-Run

OutcomesPerfect

Comp.

Monop-

Comp.

Oligopoly Monopoly

Price

EqualsP=MC,

MR, minATC

P> MC,

MR, ATC= min ATC

P> MC,

MR, ATC

P> MC,

MR, ATC

Profit Normal Normal Economic

(abnormal)

Economic

(abnormal)

Barriers to

Entry

None Low High High

# Firms Large Many Few One


11/23

Long-run Equilibrium


12/23

LONG RUN CHARACTERISTICS

All factors are variable.

LR can be viewed as the future planning of

the business firm (s).

Long Run Cost Curves can be:

Increasing

Decreasing

Constant

(These terms used with Returns to Scale)


13/23

LR COST OVERHEADS


14/23

FIGURE 12.11

Long-run Changes in Price and Quantity


15/23

Concentration Ratio and HHI Index


16/23

FourFirm Concentration Ratio:

The percentage of the value of sales

accounted for by the four largest firms in an

industry

Monopoly=100%

Oligopoly=40% or over

Monopolistic Competition=less than 40%


17/23

Herfindahl-Hirschman Index

(HHI)

The square of the percentagemarket share of each firm summed

over the largest 50 firms (or less if

fewer)


18/23

Herfindahl-Hirschman Index(HHI)

1 Firm: HHI =100^2 = 10,000

4 Firms: 3 @ 10%

1 @ 60 %

HHI = 100 + 100 + 100 + 3600 = 3900


19/23

Herfindahl-

Hirschman Index(HHI)

HHI < 1000 - Competitive

HHI between 1000 and 1800 -

Moderately Competitive

HHI > 1800 - Uncompetitive


20/23

PRS Quizzes

Four-Firm Concentration Ratio

HHI


21/23

Review


22/23

Review for Exam:

Understanding the Business Firm The firms production function (total and marginal

product of labor)

Short run cost curves of the firm (total fixed,ATC, AVC, AFC and MC)

Long run cost curves

Models and economic conditions for firms in

different market structures: Perfect Competition,Monopolistic Competition, Oligopoly andMonopoly.

Long run outcomes for firms in the different

market structures


23/23

PRS Quizzes

Econ 103B L16 April 1 Exam Review, Kerry's Tax Plan & Off Shore Tax Haven Video

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Transcript of Econ 103B L16 April 1 Exam Review, Kerry's Tax Plan & Off Shore Tax Haven Video