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Q1. Suppose there is a 50-50 chance that a risk adverse individual with a current wealth of $20000 will contract a debilitating disease and suffer a loss of $10000. Calculate the cost of actuarially fair insurance in this situation and draw a utility income graph to show that the individual will prefer fair insurance against this loss to accepting the gamble insured.
Q2. Suppose that the average household in a state consume 800 gallon of gasoline per year. a 20-cent gasoline tax in introduced, coupled with $160 annual tax rebate per household. Will the household be better or worse off under the new program?
Hero Nakamura is CEO of the Cola King Bottling Company a small regional producer operating in the Pacific Northwest. Nakamura is considering two alternative expansion proposals
Identify one positive or negative supply shock in the last decade and what is the impact that the shock has had in our economy.
Explain why the different definitions are important also explain the different procedures of the money supply.
Do you think the net effects of trade blocs are good or bad for world trade? Why? How do the efforts of the WTO relate to these trade blocs.
The bank and pays interest at the market interest rate of 4 percent. Is it correct to say that the cost to Mary of living in her house is less than the cost to John.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
Explain the logic of the Ricardian view of government debt and evaluating its practical relevance.
Compare the consumption levels of workers in both countries. Explains the diversity between the countries.
The law of demand states that other things equal
A major employer in a small town announces upcoming major layoffs of employees. What should we expect to happen to the consumption functions of the affected employees.
What are the annual accounting costs for the firm described above? What are the annual explicit costs for the firm described above?
Using a wholesale cost of $4 per case in each state, calculate the breakeven output quantities for each alternative.
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