1, Boeing, a monopolist in commercial aircraft, is being sued by the U.S. Justice Department for anticompetitive behavior. Imagine you have been hired as a consultant by both Boeing and the Justice Department to outline opening arguments in this case for both sides.
a. What points would Boeing use to defend its position in the commercial aircraft business?
b. What arguments would the Justice Department use against Boeing?
2, Briefly explain in your own words the terms “public goods” and “common resources.”
Use the terms [rival, non-rival, excludable, non-excludable] given in the Aplia exercise entitled “Steal this Signal” to explain why goods produced in perfect competition are both rival and excludable, and why the other combinations would represent some kind of market failure.
3, Use the material in Chapter 14 on antitrust policy and in Chapter 16 on the government role in controlling negative externalities to discuss the part that government plays in the micro economy. What are the tradeoffs, the pluses and minuses, of government participation?
