Paradox of Value and Diminishing returns and natural monopoly
After completing your readings in the text, go to the Online Learning Center by clicking here. Upload to the Week 3 Dropbox the results of the following exercises:
In Chapter 6, there is a study called the Paradox of Value (generically referred to as the Diamond-Water paradox). Write a brief synopsis of what the paradox is and how marginal analysis resolves the paradox. [Hint: see the explanation offered in the Online Learning Center under the Chapter 6 “Origin of Idea” tab.]
Using the information found in the Chapter 7 “Origin of Idea” module, identify who gave us the ideas of diminishing returns and natural monopoly and explain these concepts in your own words.
Using the Interactive Graph 7.1 Production and Costs in Chapter 7, simulate increasing productivity by moving the Productivity Index from 0 to 25%. What happens to the total product and marginal cost columns of data? The table in the text for Figure 7.2 is similar to the one online and can be used in lieu of the online graph.
Click on the right hand side and choose chapter 6 or 7 . it will than show you the material
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