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In "The Consequences of Mr. Keynes," James Buchanan and Richard Wagner argue that the "unwritten fiscal constitution" of an annual government balanced budget helped restrain the growth in government, but the Keynesian argument for a balanced budget over the business cycle has freed government and politicians from that restraint. As a result, we now see the problem of "democracy in deficit." Based on the reading and the discussion in class, explain their reasoning. Do you agree? Why?
Illustrate why are companies using more technology input while reducing labor input. Why are the Average Cost Curves U-shaped.
In your opinion, discuss when it makes sense to forego purchasing car insurance (assuming the state did not require it). In your answer, use moral hazard and risk aversion to describe your decision.
The alternative is to tie bonus pay to some absolute measure of performance. Discuss the merits as well as drawbacks of each approach.
Explain why might the private market not reach the socially optimal level of traffic without the help of government.
Elucidate how would an increase in airfares affect the number of highway fatalities in any one year
Demonstrate and explain the full process illustrate what happens when the central bank increases their long run target for inflation.
The wage in Mexico is $5. The wage in the U.S. is $20. Provide current employment, the marginal product of the last worker in Mexico is 100, and the marginal product of the last worker in the U.S. is 500.
Determine equilibrium in wheat market with help of graphs. If re is an increase in price of rice, illustrate what will be its impact on market equilibrium.
A group of investors is thinking about buying a ticket also sharing the proceeds if they win. The organizer offers the following deal.
Walmart.com announced that it wants to be "the most visited, most valued online retail site." Suppose you were hired by an outside consulting firm to evaluate Walmart.com's potential to achieve this goal.
Elucidate how many units does each industry produce, elucidate how many industries will exist in this marketplace.
Discuss and describe the effect you have on this process when you visit the ATM to get some cash to pay for your late-night pizza.
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