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A 50-meter tunnel must be constructed for a new city aqueduct. One alternative is to build a full-capacity tunnel now for $500,000. The other alternative is to build a half-capacity tunnel now for $300,000 and then build a second parallel half-capacity tunnel 20 years hence for $300,000. Each tunnel must be relined every ten years, at a cost of $20,000 for the full-capacity tunnel and $16,000 each for the half-capacity tunnels.
Determine whether the full-capacity tunnel or the half-capacity tunnel should be constructed now. Solve the problem using conventional benefit-cost ratio analysis, a 4% interest rate, and a 50-year analysis period. No reline will be required at year 50.
What is the international strategy that should be adopted by Company ABC to maintain its market share? Explain your answer.
What are some of the unintended consequences of efforts to regulate the illicit global economy? How can states more effectively reduce the negative consequences of black markets?
Assume market equilibrium price for a visit to the doctor is currently $75. The federal government decides that something fishy is going on and mandates a price ceiling of $81. This means no doctor may charge more than $81 for a visit. What wil..
What is the role of government in dealing with benefit externalities? With cost externalities? (p. 555 #3)
A Dictator Game is described: “Amanda is the dictator. She has a candy bar that she has to share with her little sister Barbara. (Mother will be angry if she doesn’t share at all). Amanda can share 50-50, or she can keep 90% for herself. Draw the gam..
Assume that marginal propensity to consume is constant at 1/2 and breakeven point is $8,000. If income is $10,000, n how much will be consumed and how much will be saved.
Congress cannot dictate how many workers industries hire at mandated wage. Given this fact, Illustrate what are effects of this law. Specifically, illustrate what happens to employment, output and total amount earned by workers.
Derive an expression for average cost. Derive an expression for marginal costs. Is there any range of production characterized by scale of economies? At what production level are scale economies exhausted?
Class, in a hundred words What are the conditions for a perfectly competitive market? What are the conditions for a monopolistic market?
explain a diagram for an industry in a developing country where infant industry protection might be a good idea. What are arguments for and against governments in developing countries giving infant industry protection to new industries.
Regarding the Sherman Act: A. Section 1 makes collusion illegal. Is this socially desirable? Are there any conditions under which collusion can be socially desirable? Explain. B. Section 2 makes it illegal for a firm to attempt to monopolize a market..
This discussion is about the excerpt from "Office Space." In the movie Peter says: “It’s not that I am lazy. It is that I just don’t care…The problem is one of motivation.” What kind of problem is depicted in the movie? Is it one of moral hazard or ..
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