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The United States claims that Canada subsidizes the production of softwood lumber and that imports of Canadian lumber damage the interests of U.S. producers. The United States has imposed a tariff on Canadian imports to counter the subsidy. Canada is thinking of retaliating by refusing to export water to California. Table 1 shows a payoff matrix for the game that the United States and Canada are playing.
Is this game like a prisoners' dilemma or different in some crucial way? Explain. Which country would benefit more from a free-trade agreement?
Evaluate whether management's controls operated effectively.
A U.S. firm is considering moving its production to Mexico. Its estimated production function is q = L 0.5 K 0.5 . The U.S. factor prices are w = r = 10. The Mexican factor prices are w* = 5, r* = 10. What is the optimal input bundle ( L,K..
Calculate the initial investment outlay and operating cash flow
How are population growth, poverty, and land pressures interrelated? Explain how these problems can create a vicious circle of events.
If the market is rational, would the painting that previously sold in the "hot" market necessarily fetch a higher price at the auction? What biases that were discussed in class may cause the painting that previously sold in the "hot" market indeed..
Why do you (we hope!) choose different policies for each? What about new inventions, such as computers, antibiotics, or toothpastes? Is some sort of regulation needed here too? If not, why not?
Calculate the percent change in price that occurs in moving from point A (the "base" case) to point B, using the midpoint formula. (If directed by your instructor, also calculate this using the log-difference formula.)
You have a contractor make improvements to a business rental for a fixxed price of $64,000. With this improvement you can obtain additional rent payments of $1,200 per month. You estimate the improvements will cause extra monthly expenses
How does this complicate the job of estimating the total social costs of pollution-control regulations?
Suppose that the economy starts at equilibrium and the mpc = 0.8. What would be the effect of a 500 increase intaxes once all the rounds of the multiplier process are complete
What is the effect of a fiscal expansion on output and interest rates when exchange rates are fixed and capital is perfectly mobile? Show this rigorously, using the model developed in Section 12-5.
What is your view on this?
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