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a) Explain why cigarette smoking is often described as a good with negative externalities.
b) Why might a tax on cigarettes induce the market for cigarettes to perform more efficiently?
c) How would you evaluate a proposal to ban cigarette smoking? Would a ban on smoking necessarily be economically efficient?
A five-person city is debating the provision of the annual July 4th Fireworks Display that everyone in the city would be able to enjoy. The cost of providing the display is fixed at $250. The willingness to pay for the festival is given in the fol..
The firms and workers in Alpha form expectations adaptively. The firms and workers in Omega form expectations rationally. Their otherwise identical economies are initially in equilibrium at the natural level of output with 10 percent inflation.
Review The Shell Report and summarize potential stakeholders that could be interested in this report. For each potential stakeholder formulate a financial or non-financial performance indicator.
Based on the information for the U.S. for the period 1970 to 1983, the following regression results were obtained, GNPt = -787.4723 + 8.0863M1t r2 = 0.9912
you are the manager of a monopoly. a typical consumers inverse demand function for your firms product is p 250 - 40q
Are these pricing rules consistent with the analysis of monopoly in this chapter?
Inflation affects creditors and debtors. Suppose the Canadian debtors borrowed $100 from the Canadian creditors on December 31, 1992 and promised to pay back $105 on December 31, 1993. This is equivalent to paying back a nominal interest rate of 5..
Why is advertising prevalent in many oligopolies, especially when industry demand is inelastic Illustrate your answer by assuming that with advertising, a firm's demand curve has price elasticity of -1.5 and without advertising, it is -2. If MC is..
For three years, there was no technological change in Longland but capital per hour of labor increased from $10 to $20 to $30 and real GDP per hour of labor increased from $3.80 to $5.70 to $7.13. Then, in the fourth year, capital per hour of labo..
A decision maker wishedto maximize total benefit, B=3x+xy+y, subject to the cost of constraint, C=4x+2y=70. Set upthe Lagrangian and then determine the values of x and y at the maximum level of benefit,given the constraint. What are the maximum be..
Country A has 1500 units of labor and can produce two goods, manufactures and food. A's producers take 5 units of labor to produce one unit of manufactures and 6 units to produce one unit of food. Country B has 1800 units of labor and takes 3 unit..
The present value of K payable after 2 years is $960. If the force of interest is cut in half, the present value becomes $1200. What is the present value if the effective annual discount rate is cut in half
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