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How much income will he conceal (i.e., fail to report) if the probability of being caught is 0.1? Leo, who has a utility-of-wealth function U(w) = ln(w + 10), has $500 of income before tax and is taxed at a rate of 25% of earned income. If he is caught underreporting his income he will have to pay the taxes owed and in addition will pay a fine of $2 for every dollar of income he failed to report.
In a closed agricultural economy, a new water source has been discovered that is expected to provide a steady supply of water for the crops and thereby increasing expected output in the future. What happens to the real interest rate and output? Descr..
What are five challenges China’s economy faces as its leadership tries to change the source of growth from exports and public investment to consumption? Why might a slowdown in China’s economy not pose serious problems for the U.S. economy?
q1. a budget deficit that is only temporary cannot be the source of inflation. is this statement true false or
Two major highways that affect traffic flows in Orlando include Interstate 4 (I-4) and State Road 408. Motorists are not required to pay a toll to drive on Interstate 4, whereas they are required to pay a toll to drive on State Road 408. If at a give..
Sally the Sleek’s preferences can be described by the utility function U(x,y) = x^2y^3/512. Prices are px = 2 and py = 6; she has an income of $80 to spend. How much should Sally consume of x and y in order to maximize utility, given her income?
Over the same time period, the annual rate of inflation is 3%. What is the exact total percentage increase in the real wage over this entire time period.
During the summer, Frank made enough money to pay off the entire balance due on the car as of October 1. How much did Frank owe on October 1?
Broadway Inc. is considering a new musical. The initial investment required is $880,000. Every year, the free cash flow from the project is expected to be $80,000, continuing forever. What is the true NPV of the project if the company can abandon th..
Suppose Sammie Wall currently has a monopoly on widgets. The inverse demand function for the only customer interested in widgets is [P=40-6Q] and the cost to produced widgets can be described by the following cost function: [C=10+2Q^2] . If Sammie de..
Using the ZZ/Y and NX graphs, illustrate graphically and explain what effect an increase in government spending will have on output, exports, imports, and net exports. Clearly label all curves and clearly label the initial and final equilibria
The right demand shift results into an increase in equilibrium price. The price down of necessity goods results in increases of both demand and total revenue. The price down for long-run results in increases of both demand and total revenue.
Problems exist within the firm. There were problems of collective action, public goods, knowledge problems, and perverse incentives to name some.
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