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Question: You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over 15 million on related paperwork and compliance costs. Moreover, depending on the locale, telecom taxes can amount to as much as 25 percent of a consumer's phone bill. These higgh tax rates on telecom industry has led to a highly competitive market. Your best estimates indicate that, based on current tax rates, the monthly market demand for telecommunication services is given by Qd= 300-4P and the market supply (including taxes) is Qs=3P-120 (both in millions), where P is the monthly price of the telecommunication services.
The Senator is considering tax reform that would dramatically cut tax rates, leading to a supply function under the new tax policy of Qs = 3.2P - 120. How much money per unit would a typical consumer save each month as a result of the proposed legislation?
Kate has $20. Fish sandwiches cost $5, and a cup of espresso costs $4. Draw Kate's budget constraint. If espresso goes on sale for $2 a cup.
What are the optimal tax rates that the government should impose on each good?
Describe how the budget constraint of a household in a two-period model is affected by each of the following changes. In each case, do you think the household is better off or worse off? If ambiguous, what does the answer depend on?
How might the calculation of the margin of safety be used for decision-making during a period of economic downturn? How might the degree of operating leverage be used for decision-making during a period of economic downturn?
How does temperature affect water availability in an ecosystem? Would you expect endangered species to be more frequently generalists or specialists
Why does GDP accounting only include the final value of goods and services produced? What would be the problem if intermediate products were included?
A proposal has been made to replace a large heat exchanger (3 years ago, the initial cost was $85,000) with a new, more efficient unit at a cost of $120,000. The existing heat exchanger is being depreciated by the MACRS method.
A fashion firm manufactures outfits using two inputs, design skills (L) and expensive materials (M). The cost of fabrication is small and might be ignored as a first approximation.
Discuss how to market a property and how the principles of marketing assist in keeping a property rented. Do you advertise commercial and residential the same?
Solve for equilibrium output. (Hint: Eliminate the interest rate from the IS and LM relations.) Derive the multiplier (the effect of a change of one unit in autonomous spend- ing on output).
What is the profit-maximizing price of carpets? What is the maximum amount of profit that the firm can earn selling carpets?
What are some costs of unemployment
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