Question Six (worth nine points)

1. Food at a food court in an airport is much more expensive than at at a food court in a mall. Why is there greater scarcity for the airport? Was this scarcity created by someone? Who has the power of scarcity?

1. Here is a link to a restaurant in Maine that only accepts reservations by postcard: https://people.com/food/erin-frenchs-restaurant-the-lost-kitchen-is-accepting-postcards-for-reservations-all-the-details/

Why is there scarcity? What would be the problem with the restaurant owners opening up ten new locations throughout Maine? Why don't the owners simply charge $800 for their meals? What return are the owners capturing with their power of scarcity?

1. Here is a link to a discussion of how to visit Katmai National Parkhttps://www.boundfornowhere.com/blog2/howtogetto-katmainp

What is the basis of the power of scarcity?Why doesn't the government, which owns the national park, exercise its power of scarcity to get an enormous return?Who is capturing returns from the power of scarcity? (And if you would rather talk about the Boundary Waters go for it.)

Bonus Question (worth four points) For the occupations you were looking at, can you attribute any of the relatively high wages to the power of scarcity? Explain your reasoning.

Question Seven (worth eight points)

Economists argue that we are in equilibrium when economic profits are equal to zero. Making up a numerical example and telling stories explain the reasoning by economists.In your answer do the following.Explain how zero economic profits doesn't mean that people aren't making any money; why economists believe that negative economic profits means that someone else is earning positive economic profits and therefore we will see people exit the occupation/market they are in; and why economists believe that positive economic profits means people want to enter that occupation.

Question Eight (worth six points)

Positive economic profits should result in people/firms trying to enter a market. If positive economic profits persist then we should see people being willing to use resources to try to enter the market and it should be that there are barriers to entry.

1. Give an example of a market where there are positive economic profits and highlight the evidence that people are trying to enter this market.

Bonus Question (worth six points)

Assume government uses dollar fines or jail time as a punishment designed to deter certain types of behavior. Give examples (think of the concept of opportunity cost) where imposing the same fines for all people for some offense would end up treating people unequally and imposing the same fail time for all people convicted of some offense would end up treating people unequally. Be specific.