ECON 509 Macroeconomic Analysis

Task:

Please follow the instructions on the syllabus indicating how to complete and turn in this assignment.  

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1. Why does producing where P = MC indicate allocative efficiency?

2.  Why does producing at the minimum of ATC indicate productive efficiency?

3.  Using the notion of total surplus, explain why perfectly competitive firms are efficient by monopolies are not.  Be sure to draw graphs to explain your answer.

4.  There has always been active debate surrounding the idea of affirmative action.  Define affirmative action, and provide an example or two of policies illustrative of affirmative action.  Finally, using the equity vs efficiency framework, discuss at length the arguments presented by either side of the affirmative action debate, and conclude with your own opinion on the issue.  This should take you at least two pages.

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