Principles of Microeconomics,
14th Edition by Karl E. Case
Complete Chapter Solutions Manual
are included (Ch 1 to 22)
** Immediate Download
** Swift Response
** All Chapters included
,Table of Contents are given below
1.The Scope and Method of Economics
2.The Economic Problem: Scarcity and Choice
3.Demand, Supply, and Market Equilibrium
4.Demand and Supply Applications
5.Elasticity
6.Household Behavior and Consumer Choice
7.The Production Process: The Behavior of Profit-Maximizing Firms
8.Short-Run Costs and Output Decisions
9.Long-Run Costs and Output Decisions
10.Input Demand: The Labor and Land Markets
11.Input Demand: The Capital Market and the Investment Decision
12.General Equilibrium and the Efficiency of Perfect Competition
13.Monopoly and Antitrust Policy
14.Oligopoly
15.Monopolistic Competition
16.Externalities, Public Goods, and Common Resources
17.Uncertainty and Asymmetric Information
18.Income Distribution and Poverty
19.Public Finance: The Economics of Taxation
20.International Trade, Comparative Advantage, and Protectionism
21.Economic Growth in Developing Economies
22.Critical Thinking about Research
,Solutions Manual organized in reverse order, with the last chapter displayed first, to ensure that all chapters
are included in this document. (Complete Chapters included Ch22-1)
CHAPTER 22 (CHAPTER 36 IN THE FULL TEXT)
1.1 (a) There may be many factors that would cause the incidence of heart disease to be more
pronounced in those office workers studied, including the possibility that people who regularly
dine on fast food also make other, less healthy lifestyle choices that could lead to higher rates
of heart disease.
(b) More women live in senior assisted living facilities because, on average, they tend to outlive
men. It is not so much a factor of older men not needing as much assistance as older women,
but that there are more older women in the population than older men.
(c) Students who attend prestigious private schools would have likely earned more than the
average student at a typical public university regardless of where they went to college.
Prestigious private universities are more selective when choosing students, and these students
most likely had greater earning potential than those not selected. Also, students with greater
earning potential are more likely to apply to these prestigious private universities.
1.2 The original British plan was to add armor to those areas of returning planes that had the most
bullet holes. Since these planes made it back to Britain, holes in these areas were not primarily
responsible for planes going down. Wald correctly surmised that if planes with this type of damage
were able to return, it must be planes that had damage to the other parts of the aircraft that were
actually being shot down, so these other parts were the areas that needed the additional armor.
2.1 (a) This is an example of positive correlation. They are positively correlated because as the number
of attorneys increases, the number of sports cars owned by attorneys will increase. This is not
an example of causation, however, because being an attorney does not cause a person to buy a
foreign sports car.
(b) This is an example of causality, because the higher amounts of rain are responsible for the
higher incidences of flooding. It is also a positive correlation because more rain means more
flooding.
(c) This could be an example of causality, because it is possible that living in a fraternity house is
more conducive to receiving a lower grade point average. It is a negative correlation because
as the likelihood of living in a fraternity house increases, the grade point average falls.
(d) This is an example of positive correlation. They are positively correlated because as the number
of men who are bald or losing their hair increase, then number who also wear eyeglasses will
increase. This is not an example of causation, however, because being bald or losing hair does
not cause a person to wear eyeglasses.
(e) This is an example of negative correlation. They are negatively correlated because as the
number of people who regularly recycle increases, the number who drive large SUVs will
decrease. This is not an example of causation, however, because recycling trash does not cause
someone to not buy an SUV, just as not recycling trash does not cause someone to buy an SUV.
2.2 (a) The rate of death in Group A is () = 20%.
(b) The rate of death in Group B is () = 11.1%
(c) The above answers suggest that the insecticide treatment is effective in reducing deaths from
Dutch Elm Disease.
(d) Since we are told that the insecticide treatment is ineffective, the answer above is very
misleading. If we use the intention-to-treat method for Group B, the rate of death is calculated
as () = 20%, giving the same answer as we had for Group A, which we know it should
be since the insecticide treatment is actually ineffective.
, 410 Case/Fair/Oster, Principles of Microeconomics, 14th Edition
2.3 August 31 is the cutoff date for entering school, so students who turn 6 years old on August 31 will
be the youngest in their class and will therefore have the most schooling by the time they turn 16
and can potentially drop out. Students who turn 6 years old on September 1 will have to wait an
entire year before they can enter first grade and will therefore be the oldest in their class, and will
also have the least amount of schooling by the time they turn 16 and can choose to drop out. With
regression discontinuity, we would look at samples of the amount of schooling attained by those
students with birthdays the closest to, and on either side of, August 31. If date of birth actually does
correlate with years of schooling, we would expect to see those students born closest to the cutoff
date of August 31, but not after August 31, to attain the most amount of schooling and those students
born closest to August 31, but not on or before August 31, to attain the least amount of schooling.
2.4 Let ebeg and wbeg denote the average monthly energy use for homes in East Magoo and West
Magoo in 2014, and let eend and wend denote the average monthly energy use for homes in East
Magoo and West Magoo in 2015. Using the difference-in-differences method, the effect of the
increase in the energy use tax on the average monthly amount of energy used per home in East
Magoo is estimated as: Effect = eend – ebeg – (wend – wbeg), or [1,917 – 1,775 – (2,033 – 1,815)]
= −76kWh. So, on average, the effect of the increase in the energy use tax is estimated to be a
decrease in energy use of 76 kWh per month for homes in East Magoo.
2.5 While electricity use did, indeed, increase in East Magoo during 2015, it also increased in West
Magoo. This could easily be the result of a hotter summer and/or a colder winter in 2015 compared
to 2014, which would explain the increase in power consumption. What the mayor did not look at
was the percentage increase in power consumption in 2015 in both towns. In West Magoo, power
consumption increased by 12 percent while in East Magoo, it only increased by 8 percent. Using
the difference-in-differences method takes into account factors like warmer or colder seasons and
provides a result which estimates the true impact of the tax increase.
3.1 Statistical significance will be greater the larger the sample size and the less variation that exists in
the population sampled.
In Scenario 1, the sample size is small and the characteristics of the people surveyed are likely to
be quite varied. The survey results from this scenario would likely be the least statistically
significant.
In Scenario 2, the sample size is large, but the characteristics of the people surveyed are likely to
be quite varied.
In Scenario 3, the characteristics of the people surveyed are likely to be of low variation, but the
sample size is small.
In Scenario 4, the sample size is large and the characteristics of the people surveyed are likely to
be of low variation. The survey results from this scenario would likely be the most statistically
significant.
14th Edition by Karl E. Case
Complete Chapter Solutions Manual
are included (Ch 1 to 22)
** Immediate Download
** Swift Response
** All Chapters included
,Table of Contents are given below
1.The Scope and Method of Economics
2.The Economic Problem: Scarcity and Choice
3.Demand, Supply, and Market Equilibrium
4.Demand and Supply Applications
5.Elasticity
6.Household Behavior and Consumer Choice
7.The Production Process: The Behavior of Profit-Maximizing Firms
8.Short-Run Costs and Output Decisions
9.Long-Run Costs and Output Decisions
10.Input Demand: The Labor and Land Markets
11.Input Demand: The Capital Market and the Investment Decision
12.General Equilibrium and the Efficiency of Perfect Competition
13.Monopoly and Antitrust Policy
14.Oligopoly
15.Monopolistic Competition
16.Externalities, Public Goods, and Common Resources
17.Uncertainty and Asymmetric Information
18.Income Distribution and Poverty
19.Public Finance: The Economics of Taxation
20.International Trade, Comparative Advantage, and Protectionism
21.Economic Growth in Developing Economies
22.Critical Thinking about Research
,Solutions Manual organized in reverse order, with the last chapter displayed first, to ensure that all chapters
are included in this document. (Complete Chapters included Ch22-1)
CHAPTER 22 (CHAPTER 36 IN THE FULL TEXT)
1.1 (a) There may be many factors that would cause the incidence of heart disease to be more
pronounced in those office workers studied, including the possibility that people who regularly
dine on fast food also make other, less healthy lifestyle choices that could lead to higher rates
of heart disease.
(b) More women live in senior assisted living facilities because, on average, they tend to outlive
men. It is not so much a factor of older men not needing as much assistance as older women,
but that there are more older women in the population than older men.
(c) Students who attend prestigious private schools would have likely earned more than the
average student at a typical public university regardless of where they went to college.
Prestigious private universities are more selective when choosing students, and these students
most likely had greater earning potential than those not selected. Also, students with greater
earning potential are more likely to apply to these prestigious private universities.
1.2 The original British plan was to add armor to those areas of returning planes that had the most
bullet holes. Since these planes made it back to Britain, holes in these areas were not primarily
responsible for planes going down. Wald correctly surmised that if planes with this type of damage
were able to return, it must be planes that had damage to the other parts of the aircraft that were
actually being shot down, so these other parts were the areas that needed the additional armor.
2.1 (a) This is an example of positive correlation. They are positively correlated because as the number
of attorneys increases, the number of sports cars owned by attorneys will increase. This is not
an example of causation, however, because being an attorney does not cause a person to buy a
foreign sports car.
(b) This is an example of causality, because the higher amounts of rain are responsible for the
higher incidences of flooding. It is also a positive correlation because more rain means more
flooding.
(c) This could be an example of causality, because it is possible that living in a fraternity house is
more conducive to receiving a lower grade point average. It is a negative correlation because
as the likelihood of living in a fraternity house increases, the grade point average falls.
(d) This is an example of positive correlation. They are positively correlated because as the number
of men who are bald or losing their hair increase, then number who also wear eyeglasses will
increase. This is not an example of causation, however, because being bald or losing hair does
not cause a person to wear eyeglasses.
(e) This is an example of negative correlation. They are negatively correlated because as the
number of people who regularly recycle increases, the number who drive large SUVs will
decrease. This is not an example of causation, however, because recycling trash does not cause
someone to not buy an SUV, just as not recycling trash does not cause someone to buy an SUV.
2.2 (a) The rate of death in Group A is () = 20%.
(b) The rate of death in Group B is () = 11.1%
(c) The above answers suggest that the insecticide treatment is effective in reducing deaths from
Dutch Elm Disease.
(d) Since we are told that the insecticide treatment is ineffective, the answer above is very
misleading. If we use the intention-to-treat method for Group B, the rate of death is calculated
as () = 20%, giving the same answer as we had for Group A, which we know it should
be since the insecticide treatment is actually ineffective.
, 410 Case/Fair/Oster, Principles of Microeconomics, 14th Edition
2.3 August 31 is the cutoff date for entering school, so students who turn 6 years old on August 31 will
be the youngest in their class and will therefore have the most schooling by the time they turn 16
and can potentially drop out. Students who turn 6 years old on September 1 will have to wait an
entire year before they can enter first grade and will therefore be the oldest in their class, and will
also have the least amount of schooling by the time they turn 16 and can choose to drop out. With
regression discontinuity, we would look at samples of the amount of schooling attained by those
students with birthdays the closest to, and on either side of, August 31. If date of birth actually does
correlate with years of schooling, we would expect to see those students born closest to the cutoff
date of August 31, but not after August 31, to attain the most amount of schooling and those students
born closest to August 31, but not on or before August 31, to attain the least amount of schooling.
2.4 Let ebeg and wbeg denote the average monthly energy use for homes in East Magoo and West
Magoo in 2014, and let eend and wend denote the average monthly energy use for homes in East
Magoo and West Magoo in 2015. Using the difference-in-differences method, the effect of the
increase in the energy use tax on the average monthly amount of energy used per home in East
Magoo is estimated as: Effect = eend – ebeg – (wend – wbeg), or [1,917 – 1,775 – (2,033 – 1,815)]
= −76kWh. So, on average, the effect of the increase in the energy use tax is estimated to be a
decrease in energy use of 76 kWh per month for homes in East Magoo.
2.5 While electricity use did, indeed, increase in East Magoo during 2015, it also increased in West
Magoo. This could easily be the result of a hotter summer and/or a colder winter in 2015 compared
to 2014, which would explain the increase in power consumption. What the mayor did not look at
was the percentage increase in power consumption in 2015 in both towns. In West Magoo, power
consumption increased by 12 percent while in East Magoo, it only increased by 8 percent. Using
the difference-in-differences method takes into account factors like warmer or colder seasons and
provides a result which estimates the true impact of the tax increase.
3.1 Statistical significance will be greater the larger the sample size and the less variation that exists in
the population sampled.
In Scenario 1, the sample size is small and the characteristics of the people surveyed are likely to
be quite varied. The survey results from this scenario would likely be the least statistically
significant.
In Scenario 2, the sample size is large, but the characteristics of the people surveyed are likely to
be quite varied.
In Scenario 3, the characteristics of the people surveyed are likely to be of low variation, but the
sample size is small.
In Scenario 4, the sample size is large and the characteristics of the people surveyed are likely to
be of low variation. The survey results from this scenario would likely be the most statistically
significant.
