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Suppose there is a increase in payroll taxes, which does not lead to a decrease in hours worked. A friend says that the tax generates no excess burden because it does not lead to changes in behaviour. Is this statement true or false? Explain using a simple labour-leisure choice model, and do not forget to make the distinction between substitution and income effects.
Currently, there is a $0.50 copayment on drugs. The HMO has decided to raise this to $1.00 per prescription. The cost of a prescription is $6.00, which mean the HMO's contribution to the total cost will fall from $5.50 to $5.00. How much will be dema..
Assume that all firms want to maximize profits, and that the price mechanism is allowed to freely fluctuate based upon market supply and demand. Appraise this statement: A monopolist will charge a lower price and produce a higher quantity of a good t..
find the current set of reserve requirements that banks must meet. Then calculate the reserve requirements for banks with the following amounts of transactions deposits.
What organizational characteristics facilitate embracing accidents as sources of innovative products and services? Consider 3M and Post-it Notes.
If nominal GDP in some year is $280 and real GDP is $160. The GDP price index for that year is.
Find the firm's marginal revenue. What is the profit-maximizing level of output and price? If TC = 2 + 2q + q^2 , does the monopolist make any profit? What is the competitive market equilibrium? Find social cost of monopoly.
Abdul spends all of his income on food (F) and shelter (S). His budget line is given by the equation 5F + 20S = 100. Which of the following consumption bundles is part of his consumption possibilities?
Use the information below to calculate the Consumer Price Index and the inflation rate. The base year is 1975.
Consider making an initial investment in a fund paying 25% of $1,000 the first year and decreasing your investment by 20% per year. What would be the present amount equivalent to a four year investment.
Suppose that a consumer has $375 to spend in good X and good Y.The price of good Xis $25 and the price of good Y is $75. 1)write down the consumer`s budget constraint. What is the Maximum quantity of good X he can afford?What is the maximum quantity ..
Draw a production possibilities curve for the pleasure you get between hanging with friends and from doing your Economics problem set. Are these activities complementary or are they substitutes? Does it matter which friend you are studying with? How ..
q1. in recent years the value of the dollar had declined relative to the euro. what does that mean for european
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