USE THE CASE STUDY PRICESLY TO SOLVE THE QUESTIONS

The United States is today the only truly global power. Its military reachwhether on land, at sea, or in the airextends to every point on the globe. Its economic prowess fuels world trade and industry. Its political and cultural appealwhat Joseph Nye has called soft poweris so extensive that most international institutions reflect American interests. America's position in the world is uniqueno other country in history has ever come close.

But is America's exalted position sustainable? Militarily, the vast gap between the United States and everyone else is growing. Whereas defense spending in most other countries is falling, U.S. defense spending is rising rapidly. This year's requested increase in defense spending is greater than the entire Chinese defense budget. Most remarkably, America can afford to spend more. Defense spending takes a smaller share of the U.S. gross domestic product than it did a decade agoand even the Bush administration's projected increases will produce an overall budget equal to only about 3.5 percent of GDP, about half of Cold War highs. There is little prospect of any country or group of countries devoting the resources necessary to begin competing with the United States militarily, let alone surpassing it.

Economically, the United States may not widen its edge over its competitors, but neither is it likely to fall behind. The U.S. economy has proven itself at least as adept as its major competitors in realizing the productivity gains made possible by information technology. Europe and Japan face severe demographic challenges as their populations rapidly age, creating likely labor shortages and severe budgetary pressures. China is modernizing rapidly, and Russia may have turned the corner, but their economies today are comparable in output to those of Italy and Belgiumand they have yet to develop a political infrastructure that can support sustained economic growth.

Which brings us to the issue of how to transform this unquestioned power into influence. Unless employed deftly, America's military and economic superiority can breed resentment, even among its friends. A growing perception that Washington cares only about its own interests and is willing to use its muscle to get its way has fueled a worrisome gap between U.S. and European attitudes. European elites increasingly criticize the United States as being morally, socially, and culturally retrogradeespecially in its perceived embrace of the death penalty, predatory capitalism, and fast food and mass entertainment. Europe has also begun to exercise diplomatic muscle in international institutions and other arenas, seeking to create new international regimes designed to limit America's recourse to its hard power.

The sustainability of American power ultimately depends on the extent to which others believe it is employed not just in U.S. interests but in their interests as well. Following its victory in World War II, the United States led the effort to create not only new security institutions, such as the United Nations and NATO, but also new regimes to promote economic recovery, development, and prosperity, such as the Marshall Plan, the Bretton Woods monetary system, and the General Agreement on Trade and Tariffs to promote free trade. These institutions and agreements preserved and extended American powerbut in a way that benefited all who participated. The challenge for the United States is to do the same today.The United States is today the only truly global power. Its military reachwhether on land, at sea, or in the airextends to every point on the globe. Its economic prowess fuels world trade and industry. Its political and cultural appealwhat Joseph Nye has called soft poweris so extensive that most international institutions reflect American interests. America's position in the world is uniqueno other country in history has ever come close.

But is America's exalted position sustainable? Militarily, the vast gap between the United States and everyone else is growing. Whereas defense spending in most other countries is falling, U.S. defense spending is rising rapidly. This year's requested increase in defense spending is greater than the entire Chinese defense budget. Most remarkably, America can afford to spend more. Defense spending takes a smaller share of the U.S. gross domestic product than it did a decade agoand even the Bush administration's projected increases will produce an overall budget equal to only about 3.5 percent of GDP, about half of Cold War highs. There is little prospect of any country or group of countries devoting the resources necessary to begin competing with the United States militarily, let alone surpassing it.

Economically, the United States may not widen its edge over its competitors, but neither is it likely to fall behind. The U.S. economy has proven itself at least as adept as its major competitors in realizing the productivity gains made possible by information technology. Europe and Japan face severe demographic challenges as their populations rapidly age, creating likely labor shortages and severe budgetary pressures. China is modernizing rapidly, and Russia may have turned the corner, but their economies today are comparable in output to those of Italy and Belgiumand they have yet to develop a political infrastructure that can support sustained economic growth.

Which brings us to the issue of how to transform this unquestioned power into influence. Unless employed deftly, America's military and economic superiority can breed resentment, even among its friends. A growing perception that Washington cares only about its own interests and is willing to use its muscle to get its way has fueled a worrisome gap between U.S. and European attitudes. European elites increasingly criticize the United States as being morally, socially, and culturally retrogradeespecially in its perceived embrace of the death penalty, predatory capitalism, and fast food and mass entertainment. Europe has also begun to exercise diplomatic muscle in international institutions and other arenas, seeking to create new international regimes designed to limit America's recourse to its hard power.

The sustainability of American power ultimately depends on the extent to which others believe it is employed not just in U.S. interests but in their interests as well. Following its victory in World War II, the United States led the effort to create not only new security institutions, such as the United Nations and NATO, but also new regimes to promote economic recovery, development, and prosperity, such as the Marshall Plan, the Bretton Woods monetary system, and the General Agreement on Trade and Tariffs to promote free trade. These institutions and agreements preserved and extended American powerbut in a way that benefited all who participated. The challenge for the United States is to do the same today.The United States is today the only truly global power. Its military reachwhether on land, at sea, or in the airextends to every point on the globe. Its economic prowess fuels world trade and industry. Its political and cultural appealwhat Joseph Nye has called soft poweris so extensive that most international institutions reflect American interests. America's position in the world is uniqueno other country in history has ever come close.

But is America's exalted position sustainable? Militarily, the vast gap between the United States and everyone else is growing. Whereas defense spending in most other countries is falling, U.S. defense spending is rising rapidly. This year's requested increase in defense spending is greater than the entire Chinese defense budget. Most remarkably, America can afford to spend more. Defense spending takes a smaller share of the U.S. gross domestic product than it did a decade agoand even the Bush administration's projected increases will produce an overall budget equal to only about 3.5 percent of GDP, about half of Cold War highs. There is little prospect of any country or group of countries devoting the resources necessary to begin competing with the United States militarily, let alone surpassing it.

Economically, the United States may not widen its edge over its competitors, but neither is it likely to fall behind. The U.S. economy has proven itself at least as adept as its major competitors in realizing the productivity gains made possible by information technology. Europe and Japan face severe demographic challenges as their populations rapidly age, creating likely labor shortages and severe budgetary pressures. China is modernizing rapidly, and Russia may have turned the corner, but their economies today are comparable in output to those of Italy and Belgiumand they have yet to develop a political infrastructure that can support sustained economic growth.

Which brings us to the issue of how to transform this unquestioned power into influence. Unless employed deftly, America's military and economic superiority can breed resentment, even among its friends. A growing perception that Washington cares only about its own interests and is willing to use its muscle to get its way has fueled a worrisome gap between U.S. and European attitudes. European elites increasingly criticize the United States as being morally, socially, and culturally retrogradeespecially in its perceived embrace of the death penalty, predatory capitalism, and fast food and mass entertainment. Europe has also begun to exercise diplomatic muscle in international institutions and other arenas, seeking to create new international regimes designed to limit America's recourse to its hard power.

The sustainability of American power ultimately depends on the extent to which others believe it is employed not just in U.S. interests but in their interests as well. Following its victory in World War II, the United States led the effort to create not only new security institutions, such as the United Nations and NATO, but also new regimes to promote economic recovery, development, and prosperity, such as the Marshall Plan, the Bretton Woods monetary system, and the General Agreement on Trade and Tariffs to promote free trade. These institutions and agreements preserved and extended American powerbut in a way that benefited all who participated. The challenge for the United States is to do the same today.

Question 12

1.In a short-run construction development_________, the marginal cost is rising and the average adjustable cost is falling as productivity is snowballing. Consequently,

2.For a firm functioning in a textbook market________, its short-run stock is identical with the growing arm rest of_______

3.In a consumer product Edgeworth box, a situation on the contract curvature

4.In order to stem methodically the magnitude of any single consumer good's Edgeworth box, we need to distinguish

5.A movement _______from A to C characterizes

6.In a Bertrand duopoly, each thespian tries to__________

7.In a cartel, the enticement ________to cheat is noteworthy for the reason that

8.When firms in monopolistic competition are earning an economic profit, firms will

9.In order to be self-enforcing,______- an oligopoly approach must_________--

10.A monopolist appearances a downward-sloping demand curvature since

11.Explain the relationship between costs in the short run and costs in the long run. In your answer define what the "short run" means.

12.List two factors that affect how price-elastic demand for a particular good is at a moment in time and explain

13.Define what is a long-run equilibrium in a perfectly competitive, endowment economy.

14.Rank the following market structures in terms of the highest equilibrium price to the lowest: perfect competition, Stackleberg competition, monopoly, Cournot competition, Bertrand competition, shared monopoly