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Sometimes market activities (production, buying, and selling) have unintended positive or negative effects outside the market's scope. These are called externalities. As a policy maker concerned with correcting the effects of gases and particulates emitted by and local power plant.
1. What two policies could you use to reduce the total amount of emissions?
2. Why do you think they each would work?
3. What would the benefits of each action be (besides emissions reduction)?
4. What would the costs of each action be?
5. How would you decide what was the best level of emission reduction?
Owners of Sizzling Foods can earn a 14% rate of return on that land it they leased it others as a parking lot and while the last nurse hired treated 1,000 extra patients in a year. If doctors make $40,000 a year, what do nurses make?
Suppose that the market for some product has a linear downward?sloping demand curve and a linear upward sloping supply curve. Then suppose that the price of a substitute good increases and the price of an input to production also increases.
Does this production function display increasing, constant or decreasing returns to scale and find the corresponding minimum cost function assuming that w 1 and w 2 are given.
Bertrand solution. How much each of the firms is producing and what is the resulting price and how much each of the firms is producing and what is the resulting price? What are the firms' profits?
The information technology field is very competitive, and a large information technology company has employed the bank for guidance. companies may have to compete for high quality IT professionals.
a. What is your expected income next year b. Suppose that you could insure yourself against the risk of reduced consumption next year. What would the actuarially fair insurance premium be
Calculate the change in welfare compared to the free market outcome (i.e., in the absence of minimum wages). Is this a welfare gain or a loss?
Some fields have large enough quantities of both oil and natural gas that coordination must be achieved for the production of both, rather than oil a in our examples. Will fields with both oil and gas have greater difficulties in unitization.
What difference does it make, if any, if technology is moving very fast in the market so that this game proves to be one-time-only simultaneous play?
Consider A monopolist that faces the constant elasticity demand curve y(p) = p^a where a 0.Also assume that the monopolist pays a quantity tax of t > 0.
The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing rice, exporting steel, and neither importing nor exporting TVs. We can conclude..
Organize the above data into the appropriate categories for the current and capital accounts; determine the current account balance, the capital account balance, and the official settlements account balance.
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